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April 7, 2010, at 6:00 am If you're new to BFS, please subscribe to my RSS feed. It shows me a vote of support and keeps me motivated to keep your attention. If you have any questions or comments for me, please contact me and I'll get back to you asap. Thanks for visiting!
There seems to be all sorts of ways to measure your financial health, but here’s the list of points I’d keep an eye on:
1) Am I spending significantly less than I earn? If I’m not, I’d take a look at my spending, make a budget, and cut the unnecessary expenses. If that didn’t fix it, I’d look into getting a better-paying job or at other income sources.
2) Do I have a solid emergency fund? If I have at least 3 months of expenses (preferably 6 months or more), I’d move on. Otherwise, I’d start funneling cash into an emergency account. Even starting with $50 a month is better than no backup fund at all.
3) Am I saving enough for retirement? I’d take a look at a few retirement suggestions and figure out if I’m on track. If I’m not, I’d look into my options. Do I have a 401k, IRA, or a Roth IRA? Would one of these work for me?
4) What kind of debt do I have? If I do have some, I’d make a little list and see what I could eliminate. I’d start paying off high interest debt like credit cards before attacking car loans and mortgages.
5) Are my investments diversified? If all of my retirement savings is tied to one stock (like my company), I’d DIVERSIFY. I don’t want my entire future to rest on the back of one company.
6) Am I insured correctly? If I have health insurance, car insurance, short-term disability, long-term disability, and life insurance, I can move on. If I’m missing any of those, I’d look into my options. I don’t want to be at the mercy of anyone if I get into a car accident and can’t work. I also don’t want to die and leave my spouse with a financial mountain to climb while he’s grieving (he better be grieving…)
7) Do I have estate planning in place? If not, I need to set it up for the same reasons I need life insurance.
8) Am I happy? If I’m not happy with my fiscal life, I need to figure out why and make some changes. For example, I didn’t think we had a good enough plan a few years ago. We came up with a system that made my husband and me happy.
I’ll be posting further about each one of these points in the coming weeks to flesh out the ideas.
How’s your financial health? Do you think I missed anything important?
April 6, 2010, at 6:00 am
According to this article, personal income fell in 42 states in 2009. Yet, according to this article, consumer spending is back on the rise and looks to be sustainable. We have record unemployment but the consumer market is getting better…huh.
This tells me that some people have not taken their new situation into account or the lucky ones aren’t preparing for the worst.
My husband and I are the “lucky ones” since our income didn’t fall. Neither one of us got raises, but we also didn’t get cuts. We have a solid emergency fund and several savings accounts in case the worst happens, but so far, we’re okay. But we haven’t increased our spending in the last 2 years either.
So, we are obviously not contributing to the stats of either article.
Since we know friends that have had pay cuts or gone through job losses, it’s easy for me to understand that personal incomes as a whole have fallen. I just don’t understand how consumer spending is rising…
Do you know anyone who’s started spending more than they were over the last 2 years?
Oh well, at least the economy will be puttering along pretty well by the end of 2010. Maybe some jobs will open up and personal income levels will rise as well.
April 5, 2010, at 6:00 am
My husband and I are approaching a small financial crossroads. We make his final graduate school payment in June, he graduates in August, and that will bring a small automatic raise (about $1000 a school year minimum). That means that we will have an extra $750 a month starting in August. We’re wondering what we should do with it since we have several options. I know, it’s a good problem to have, but I have a personal finance blog for a reason (I over-think money)…
Here’s the info we’re working with:
- We’re in our mid-20s and want to retire at age 52.
- Our current emergency fund has 3-4 months of expenses in it and our jobs are VERY stable.
- Our mortgage has about $73,300 left at 5.375% and is already on track to be paid off by the end of 2017 instead of 2022.
- Hubby’s car loan has about $10,700 left at 4.6% and is already on track to be paid off by the end of 2011 instead of 2013.
- We contribute 6% to my 401k, which is matched up to 6%.
- We fully fund one Roth IRA ($5000 a year).
- We put about $200 a month into our Scottrade account.
- We put $250 a month into our vacation account.
- We each get $75 a month in “fun” money.
- We also put $200 a month into a home and auto maintenance account.
Mr. BFS and I agree on a couple of things and are wondering about a few other options, so he suggested I ask you. What would you do with an extra $750 a month in our position? Do you need to know anything else in order to decide?
April 4, 2010, at 11:59 pm
BFS is a member of the Yakezie Alexa Ranking Challenge! The beginning ranking with my own domain 10 days ago was 8,531,858. Now it is 1,514,672. Yay!
The ultimate goal is to be in the top 200,000, but I’m very proud on how far we’ve come already. I’m going to give weekly updates from this point on…it’ll be like a BFS net worth update. 
I would like to sincerely thank my readers and the members of the Yakezie Challenge. I truly look forward to this blog every day because of you.
April 4, 2010, at 7:21 pm
Just wanted to say a quick thank you to Little House in the Valley for letting me guest post!
Feel free to take a look at the article, How Much House is Enough House?, to see my take on my own home.
Thanks again!
April 3, 2010, at 6:00 am
Here’s my favorite posts for this week:
I would also like to thank Daniel at Sweating the Big Stuff again for inviting me to guest post, How Much Do You Need for Retirement? For those who don’t know, allowing less-known bloggers to post on better-known sites benefits the newbie way more than the well-established. This newbie says thank you!
If you blog or just really like a specific blog you think I should check out, feel free to email me your suggestion. I’d love to add a few more to my regular reading list or at least give a shout-out for great posts.
As always, thanks to all the bloggers I read!
April 3, 2010, at 5:00 am
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DISCLAIMER I am not a professional or a financial advisor. BFS posts are informational opinions only. Please make your own financial decisions based on personal research or see a financial advisor.
Also, there are paid links on this site. There is no obligation on your part to purchase any products advertised on this website.
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