2019 is just around the corner and many of us are setting our New Year Resolutions which may include becoming more physically fit and/or more financially fit. Most of us know how to check our physical fitness levels-heart rate, BMI, weight- but do know how to check our financial fitness level? Shannon McLay, Certified Financial Trainer and CEO of the Financial Gym has identified 5 key numbers that encompass a healthy financial fitness life. These numbers are...
15...15% is the amount you should be saving from each paycheck for retirement...this is the amount coming out of your gross pay before taxes. If you make $50,000 a year...your monthly savings would be around $625 a month
6...Once you start to saving, your goal should be to build up an emergency savings that can cover 6 months of monthly expenses (rent or mortgage payment, car payment(s), student loans, utilities, credit cards, etc).
750...750 is the credit score your should strive for. A quick way to increase your credit score it to look at your credit utilization in relationship to credit limits. Which leads to the next number...
35... Your unsecured lines of credit (which are primarily your credit cards) shouldn't be more than 35% of their limit. To quickly increase your credit score...pay balances down so utilization is 35% or less.
2...2 is the number of investment accounts you should have...one retirement account and one taxable brokerage account.
Just like getting physically fit...it takes time and discipline to get financially fit. Set your goals and slowly start working towards them. If you are interested in purchasing a home in the next year or so and would like to put a financial plan together on how to achieve this, let us know. We have some great lenders that will help get you on the path to home ownership.
We hope you have a happy and financially fit 2019!