Menachem Serraf

Rule of Thumb

Cash

• As a general rule, you should have an emergency fund to cover at least three to six months of basic living expenses (it can be more if you choose to).
• Consider building an emergency fund based on cash or cash equivalents such as daily interest plans, short-term guaranteed investment certificates (GICs) or money market funds.

Debt

• 10% – 25% of income should be put towards paying off all debts.
• In case of debt it is recommended to consolidate debt at a lower interest rate and get a loan to reduce your monthly payment. This will give you some stability and breath to allocate funds to things that matter to you and secure your financial future.

Savings

• 10% – 25% of income should be put towards savings, non-registered and registered.
• It is recommended to put at least 10% of income towards saving towards your future goals.

Personal and financial security

• 5% – 10% of income should go towards wealth protection (Life insurance, critical illness, and disability protection).
• If needed and posiable it is recommended to allocate 10% to protect your savings and insurability

Other financial security

• 5% – 10% of income should be used to cover other insurance (e.g., Car and home).
• Your other insurance needs might change over time as. This should be reconsider with every major change in your life

Living expenses and plesure

• 40% – 60% of income (i.e., the remainder) should be used for your living expenses and pleasure.
• This will change ver time when major events take place in your life e.g. buying a house, building a family, getting a promotion, or any other event that will impact your cash flow.

Great, You took the first step towrds financial security – getting a plan!

• Having a financial plan will provide you with financial security in the future.
• Starting personal wealth protection is very important specially to protect and secure for the future.