1) Live Within Your Means. Not surprisingly, this was the overwhelming top choice among financial planners and advisers. Spending less than you earn and living within your income range is the best way to ensure you meet your financial goals.
2) Protect Yourself with Adequate Insurance. Ensure your financial security by having adequate insurance coverage in place for health, disability, long-term care, auto, homeowners’ and renters’ to protect yourself and your assets.
3) Build an Emergency Savings Account. Prepare for the unexpected by having this important reserve. Keep this account separate from your savings and aim for three to six months of living expenses. Starting with a small reasonable goal – as little as $500 – will help springboard you toward this goal. Your tax return may provide a great way to start!
4) Establish Life Insurance for Wage Earner(s). Protect your family by having adequate life insurance for all wage earners. Having a policy in place to cover six to 10 times your gross annual income will ensure financial security for your loved ones if you are not there to provide for them. (http://www.nefe.org/PressRoom/News/FinancialFourMoneyHasaBracketToo/tabid/1106/Default.aspx)
Given the complexity of financial planning, the goal of the Final Four of Finances was to take part of the “madness” out of planning to get people on the right track. For a complete list of all of the 32 financial concepts, visit www.financialfour.org and complete your own bracket.
What is your Final Four? What are your top financial priorities? Each person will have different priorities based upon where they are in their financial timeline, but it is important to keep as many of the concepts in mind when taking a big picture approach to your personal finances.
After you have determined your top picks, it is time to implement toward the path to financial prosperity!