Financial Fitness

Basics of Financial Fitness

• Live within your means! (Do whatever it takes to "make your ends meet".  Fewer indulgences, lower thermostat, get a room-mate, use coupons, get an extra jobs, sensible car, public transportation, etc.)
• No consumer debt!  (Said another way, no debt should outlast the benefit.)
• Maintain your health!  (Medical problems are expensive and reduce ability to earn income.)
• Save at least 10% income per month.  (Savings for vacations, cars, houses is in addition to this.)
• Maintain excellent credit  (Have bills and loans in your name, pay all bills by their due date.)
• Take care of your car and anything else that helps you earn money.
• Keep 6m cash reserve (could use 6m CDs or bond ladders)  Use only for events leading to a lower tax bracket. (job loss, health issue, NOT a new car)
• Max out retirement vehicles (401k, Roth, IRA, etc.)
• Own your home, don't rent. (Allows much of the expense to be tax-deductible.)