Spend at least 20% of your income on financial priorities
Remember the 50/30/20 rule?
Here are a few things you should consider when allocating 20% of your income:
1. Paying off debts - Debt is expensive, so live within your means. However, if you have existing debts, pay them off first to avoid high interest rates.
2. Accumulating emergency funds - After debts are paid off, building a financial reserve for unanticipated events is the next goal. Six months' worth of living expenses saved in a safe or bank is recommended in case of a catastrophic emergency like lengthy unemployment.
3. Life Insurance - Without life insurance, families are severely vulnerable if the breadwinner dies unexpectedly. If you have a dependent spouse or children, life insurance should be a top financial priority. It is a crucial component of financial planning.
4. Retirement fund - Take charge of your retirement and start saving as soon as possible. There are several ways to save for retirement, so get professional guidance on how to develop your nest egg with the least risk.
MISMO Financials will gladly provide you with a no-obligation consultation to help you maximize your income and assist you in resolving your financial priorities.