Do you know how much you should have in emergency savings or what is a safe amount of debt to carry? Based on just two data points—your age and income— The Incentive App provides you with personalized targets across five key areas of your financial health.
Let’s go through each of the five areas and discuss some basics to understand.
1. Emergency Savings
An emergency savings fund is money you should set aside as a safety net for unexpected events. Your emergency savings target should represent an estimated amount for covering essential expenses for 3-6 months.
2. Retirement Savings
Plan for your future now. A good percentage to save per year is 15% of your pay (this includes your employer match if they offer).
The rule of thumb: as you get older, you should aim to have the following in retirement savings:
Amount in Retirement Savings
1x your salary
2x your salary
3x your salary
4x your salary
6x your salary
7x your salary
8x your salary
10x your salary
A great rule to use for budgeting is called the “50/5/15 rule”:
• Essential Expenses: 50% of budget
• Short Term Savings: 5% of budget
• Retirement Savings: 15% of total income
• Lifestyle Spending: Anything left over
50% of budget
Short Term Savings:
5% of budget
15% of total income
Essential Expenses:50% of budget
Short Term Savings:5% of budget
Retirement Savings:15% of total income
Consider a life insurance policy that is 5-10 times your annual income. Life insurance covers your beneficiaries in the event something happens to you (i.e. get run over by a bus). The death benefit is generally tax free to your beneficiaries.
Consider term insurance as an option which should be meant to cover your family at least until all children are finished with school age.
Debt needs to be managed wisely. Less than 36% of your pre-tax income should go to debt repayment.
You should always strive for as low of a Debt to Income (DTI) ratio as possible. DTI ratio is the sum of all your minimum monthly debt payments divided by your pre-tax monthly income.
Can you imagine how much easier your personal finances could be with the Incentive App tracking all five key areas? With the app you will have the ability to:
Complete money challenges that help you learn better spending and savings habits
Empower yourself through information by me, your financial professional
Link all of your accounts for a view of your complete financial health
Gain more confidence and stress less about money
In order to access the app you’ll need a specific code that I can send you. Just send me an email or DM to get things started!
“I’m on a mission to level up the American people’s knowledge of money and wealth. With the new Incentive App, we are putting the power of realtime financial knowledge in the hands of the people!”