These are guidelines for "wise" use of your money. They apply to many people's situations, but you should always think for yourself.
1. Spend no more than 30% of your income on housing. You don't want to be "house poor" with little money left for other needs.
2. Save 10% of your paycheck.
3.Spend 3 months salary on an engagement ring. The linked article says this "rule" was created by the diamond companies & you should not feel you have to spend that much.
4. When you retire, don't spend more than 4% of your savings each year.
5.120-your age=the per centage of your investment money that you put in stocks. This is one that you need to judge for yourself.
Click title for link to article by WC Porter at WiseBread.
Maggie:
ReplyDeleteMost of the advisors I've read use the formula of "110 - your age" for the percentage of stocks in your portfolio. I've used that for 20 years, and got thru the 2008 dip with half the losses of the overall stock market, and regained my losses by the end of 2009.
One other ratio to consider- keep 3-6 months of living expenses readily available as an emergency cushion.
Great! Personally, I use 100-your age, in today's investing environment.
DeleteAlso the retirement "rule" is considered out-dated these days. Most advisors now say to take out 2% of your savings a year when you're retired. We are not touching the savings for as long as possible, but then we're pretty conservative when it comes to money. I wish you well!