You have less than 3 months of expenses in your emergency fund. I recommend keeping at least 3 months in your emergency fund. Having a sufficient emergency fund can prevent you from:

1. Being forced to sell your investments in a down market
2. Running up credit cards balances
3. Being forced to withdraw from a tax inefficient source
4. Experiencing undue stress when you're not sure how you will pay your bills

You have 3-6 months of expenses in your emergency fund. Great job! This is the ideal amount to have for most people. Keep in mind if your income or expenses tend to be volatile, you may want to keep a little extra in your emergency fund.

You have 6-12 months of expenses in your emergency fund. Great job! This is a good amount to have in the bank if you are very risk averse, or tend to have unpredictable expenses or income. If that is not you, you may have some opportunity to keep less (3-6 months of expenses) in your emergency fund and invest the rest.

You have more than 1 year of expenses in your emergency fund. While not having enough in your emergency fund is dangerous, having too much is not ideal either. I generally recommend most people keep about 6 months of expenses in their emergency fund. Once your emergency fund and savings for short-term goals are met, consider investing the rest for retirement or other long-term goals.

You may be leaving opportunity on the table by not having the excess funds invested. Some of the risks of having too much in your emergency fund include:

1. Lower long term returns when compared to a diversified investment portfolio.
2. Not likely to keep up with inflation in the long run.
3. Tax inefficiency. Interest is taxed at your marginal tax rate. Other investment options may be taxed at lower rates.

You’re not sure how much you have in your emergency fund. This is an important aspect of your financial well-being and can potentially derail your financial freedom. I recommend keeping at least 3 months in your emergency fund. Having a sufficient emergency fund can prevent you from:

1. Being forced to sell your investments in a down market
2. Running up credit cards balances
3. Being forced to withdraw from a tax inefficient source
4. Experiencing undue stress when you're not sure how you will pay your bills

You are already retired – congratulations! If you’re wondering about financial freedom and are already retired, you may have some questions around living on a fixed income to make sure you don’t run out of money. If you would like a second opinion on your situation, reach out to me at the bottom and I’ll be happy to provide a complimentary consultation to answer your questions.

You’re not currently contributing to your retirement. It is important to make sure you are funding retirement accounts because social security or pensions alone will likely not be enough to achieve financial freedom. If you’re not sure where to begin, reach out to me a the bottom and I’ll be happy to provide a complimentary consultation to get you on the right track.

You are contributing to your employer retirement plan. Keep up the good work! Remember to also identify how much savings you need each year to become financially free. In most cases, this may require additional contributions beyond your employer sponsored retirement plan.

You are maxing out your retirement accounts (and then some)! You are well on your way to financial freedom (if not already there)! Keep up the good work.

You don’t have access to an employer’s retirement plan, but are saving on your own for retirement. Keep up the good work! Remember to plan retirement savings in light of your tax situation and retirement goals.

You’re not sure what is going on with your retirement accounts. It’s a confusing world out there filled with jargon (I don’t blame you). If you’re working - It is worth your time to reach out to HR or talk with a trusted co-worker to identify how your retirement plan works. Make sure you are taking full advantage your retirement benefits – your future self will thank you.

If you’re not currently employed, or not sure where to begin, reach out to me a the bottom and I’ll be happy to provide a complimentary consultation to get you on the right track.

Saving for college is not a goal of yours – and that’s totally fine! This is one less area to worry about on your personal path to financial freedom.

You are contributing to education savings account for college. Great job! This is the most tax efficient way to save for college and make sure you’re prepared when that expense comes.

Earmarking money for college expenses works – but it may not be the most tax efficient way to go about saving for college. Some education savings accounts offer tax advantages. It also ensures you’re not paying a tax bill on any gains on investments that will ultimately be used to pay for college.

If you want to keep control of the assets until the time comes – there are options to do that. Using a Roth IRA if you qualify can be one strategy (if you decide to not pay for college, the funds can be used for your own retirement). Other education funds offer the ability to transfer the account to another family member. If you need help learning your options and navigating this – reach out to me and I’d be happy to talk you through different scenarios.

Getting a plan for how you will pay for education expenses is important to keep from getting derailed from financial freedom. I’ve seen many people have this happen over the years, going into debt late into their careers (or even in retirement for grandkids). Having clearly identified goals, with plans on how they will be funded can help you avoid this common pitfall.

Having financial goals in your head is great – but it can be difficult to make them become a reality until they are written down and planned for. Make sure you talk through your goals with your spouse if you are married. Not doing so may cause problems down the line (financially and otherwise). Working towards your financial goals together can strengthen both your finances, and your relationship.

You have written financial goals – great job! Only when you have defined goals and a plan to attain them can you attain true financial freedom. If you’re married, working towards your financial goals together can strengthen both your finances, and your relationship.

You have written financial goals, which is good. Make sure you talk through your goals with your spouse if you are married. Not doing so may cause problems down the line (financially and otherwise). Working towards your financial goals together can strengthen both your finances, and your relationship.

You haven’t defined financial goals yet, which is common. It is a necessary step on the way to becoming financially free, so make sure to do this. I recommend breaking down your goals into 3 categories – needs, wants and wishes. Assign a dollar value to each goal and timeframe (I want a $15,000 boat in 10 years). Once you have your goals defined, you can begin planning for them in your written financial plan. Need help with this step? Reach out to me and I’d be happy to provide my thoughts on your situation.

Having financial knowledge is good, how you are implementing that knowledge should be documented in a written financial plan. This ensures that you are not missing any important areas, can track progress, and have a document in place for loved ones if something happens to you. Your written financial plan should at least address savings, budget, investments, debt, emergency fund, insurance, estate planning, retirement, goals, and taxes. If you’re not sure where to begin, reach out to me at the bottom and I’ll be happy to provide a complimentary consultation to get you on the right track.

You have a written financial plan keep it updated. You are doing great here, keep it up! Continue to monitor your financial plan remember to update it at least every 6 months.

You have a financial plan, but it is not being updated regularly. I recommend updating your financial plan at least every 6 months. Even if you think nothing has changed, the stock market has, you are closer to retirement, or other circumstances may require updating. A financial plan that is not being monitored and implemented does not serve it’s purpose.

You don’t currently have a financial plan. I recommend everyone get a plan in place – even if it is a basic one. Your financial plan should at least address savings, budget, investments, debt, emergency fund, insurance, estate planning, retirement, goals, and taxes. If you’re not sure where to begin, reach out to me a the bottom and I’ll be happy to provide a complimentary consultation to get you on the right track.