Money Mantras to Live By
Organization Is Half The Battle.
Mark all financial dates on your calendar. Download the LV Calendar and Seasonal To-Dos for reminders of
important dates, such as when to start preparing your taxes.
Your Income, Total Expenses, And Credit Score Are The Three
Most Important Numbers To Know.
Income: Be familiar with exactly how much you get from your paycheck each month (after taxes) so you can
Expenses: Things like rent/mortgage, cell phone, utilities, cable and groceries are your basic living expenses.
It’s important to know the total of these bills each month so that you always have enough to cover them.
Credit Score: This number measures your financial health, at least in creditors’ eyes, so it is essential to
know the number and always work to improve it.
LearnVest recommends Credit Karma for checking your credit score. It’s not your official FICO
score, but it is pretty spot on. It’s free, and easy to use.
Know Which Debts To Pay Down First And Then Commit To
It’s important to understand the difference between “good” debt and “bad” debt. Credit card debit is “bad” debt
and should be paid off as soon as possible.
The rule of thumb is to always prioritize paying down debts with the highest interest rates.
Create An Emergency Savings Fund.
Set up an automated transfer from your checking account to your emergency savings fund for each paycheck.
Save as much as you can until you have 6-9 months of living expenses stored up. That money is out of sight,
out of mind, and you will be that much better off if an economic rainy day comes along.
Don’t worry about investing until you have a cushion of savings that you can easily access.
Starting Saving For The Future NOW.
Saving for the future, especially for retirement, should be your next priority after your bad debt is paid off and
you have a cushion for an Emergency Fund.
Ask your employer about your retirement options. A lot of companies are now offering Roth
401(k)s. Find out if you have access to one.
Which Retirement Account Is Right For You?
Does your employer
provide a 401(k) plan?
Do you make more or less than Does your employer match your
$105,000 a year contributions?
MORE LESS NO YES
Open a Open a Roth Do you make more or less Great! Enroll! Contribute as
Traditional IRA IRA today!! than $105,000 a year much as possible to get the full
benefit from your employer.
Contribute to your 401(k) regardless of the Open a Roth IRA. If you can save more
non-matching. If you can save more than $16,500 than $5000 a year for retirement, then
a year for retirement, open a Traditional IRA also contribute to your 401k
Our unofficial sixth mantra is to understand where your money should go once your
living expenses and emergency savings fund are covered and established. Here’s
an infographic that explains the accounts you need based on when you want access to the funds.
IF YOU NEED THAT MONEY...
Now 5 Years For 5+ Years For
From Now Retirement From Now Education
(think: next year’s (think: Vespa, wedding, (yours or a child’s)
vacation to Italy) house, family)
THEN YOU NEED…
A savings account High yield savings A 401(k) Investment Account A College Savings
(or checking) account or (offered by at a brokerage firm Plan (also called a
employers) 529 plan) offered
Money market by your state.
account or An IRA
(offered by all
Certificate of brokerage accounts)
Make sure you dont Go for whichever These have tax Have one in your Whether you’re
pay any fees gives you a better benefits! Anyone name unless you’re saving for grad
interest rate! who has earned married and saving school or a child’s
income during together. education, there are
the year can perks to opening up
open an IRA. a 529 plan.