Financial Security Plan For:
Rule of Thumb
- 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.
- 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.
- 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.
What are your priorities in life?
For most people, financial security ranks among the most important. How you choose to protect yourself financially has its priorities. As indicated in the diagram, a life insurance program provides the solid, secure base on which to balance future investment activity.