Personal Financial Planning Tips How to Build an Emergency Cash Fund
My name is Julie Asti. I’m a Certified Financial Planner with Asti Financial Management and I’m going to talk today about how to create a financial savings plan. In looking at creating an emergency fund for your household the first thing that you are going to want to do is you are going to want to create a working budget. Now what you are going to want to find out is not only income that is coming into your household after taxes but also the fixed and the variable expenses that you have in order to look at the bottom line which is certainly going to be a positive number so that you have some money to put aside for savings for an emergency fund but in creating the emergency fund the budget is important.
Because what you are going to be looking at on an emergency fund is being able to have enough money set aside so that if something should happen to you or your partner and you weren’t able to earn the income or bring income into your house be it unemployment or an illness that you would have enough in reserve to cover your expenses so you really need to get a handle on what truly are your expenses on a monthly basis and in terms of looking at an emergency savings fund there are a couple of variables that would depend on what the appropriate amount is to have saved up. If you have a partner and you both have steady jobs with good incomes and you have been working there for a while and you feel pretty good.
About your job, you can probably do with having three months worth of expenses saved up in an emergency fund. If you are single, you are working at a new job, you are kind of unsure about your future, you may be looking to change jobs in the future you probably want to have a little bit more of a cushion because you are only relying on your own income and the income in the future may not be as stable and in that case you would probably want to look towards trying to save six months worth of expenses in a savings plan and when you are looking at an emergency fund it should always be kept in liquid savings account. You can use your checking account but ideally a savings account is going to provide you.
With maybe 1 to 3% of your interest which would help it grow over time but you want to make sure the money is liquid, it’s accessible, it is totally safe and it is going to be there when you need it. My name is Julie Asti, I’m a Certified Financial Planner with Asti Financial Management and you can learn more about my company or my services at astifinancial .
Investing Glossary What is a Spousal IRA
Hi, it’s Andrea from Smart Step where we focus on thriving today while saving for tomorrow. Today, we’re going to talk about the spousal IRA. Now, don’t hit stop. I know it sounds like a boring subject, but a little teaser for you new business owners: you can use this rule that was designed for stayathome parents to help you save for tomorrow. So let’s get into what a spousal IRA is. A spousal IRA is nothing more than a traditional IRA. However, it uses different rules to determine if you can contribute. When we first started with our traditional IRA, you had to have earned income to contribute, so all the stayathome moms and dads who were out of a workplace account and didn’t earn income weren’t able.
To save for retirement under their own name. So they tweaked some rules and now if you’re married and jointly filing for your taxes, you can use your spouse’s income to help you qualify for your IRA. So for example, let’s say you earn $50,000 and stay at home and make nothing. That means you can still contribute your $5500 and your spouse contribute his $5500 because he has more than $11,000 in income. Now, pay attention business owners. The actual rules states that it’s the lesser income earner that can use the income of the higher earning spouse. So what this means is if you just started a business, your husband is making $50,000 and let’s say you made $2000, you.
Can still contribute up to $5500 into your IRA while your husband’s contributing $5500 to his also because he makes enough to cover both of you even though you still had earned income. The only thing that you need to really pay attention to is your deductibility, but as long as your income is correct, work with a tax advisor or your investment person to make sure that you’re getting into the right account. You can save for retirement no matter how much income you have if you’re married and filed jointly. If you’re going into a traditional account, you also need to be under that 70 and a half. So here’s my action step for you this week. If you’re not saving for retirement because.
Either your employer doesn’t have a 401K or you’re a business owner and you’re not to the point yet where you want to set up your other items or if you’re a stayathome mom, no matter what your income level is, if you’re married and joint filing with your spouse, you need to set up an IRA today. So call somebody, log on to one of the investor broker accounts, and get saving for retirement today. Now, if you liked this tutorial, I’d be so happy if you’d subscribe so you can get updates in the future. I’d love it if you can share with your friends. If you want email updates where I share extra information and let you know when the new tutorials are out, come on over to Take A Smart Step.Com and remember: you.
Can have an amazing, abundant life today while still saving for a secure future tomorrow.