Experts Rank Top Financial Priorities
DENVER, April 5, 2012 /PRNewswire-USNewswire/ -- March Madness is over, but not all of the brackets have been filled out. With the tax deadline looming, there is a financial frenzy on the horizon and expert financial planners and advisors are weighing in on what Americans should consider their top priorities in 2012.
The National Endowment for Financial Education (NEFE) and the Financial Planning Association (FPA) have partnered on the Financial Four, a bracket of 32 concepts to help people identify the financial areas most important to them.
"There aren't any upsets in this bracket," says Ted Beck, president and CEO of NEFE. "It can be overwhelming to prioritize all of the things you need to accomplish to keep your financial life in order. The Financial Four is a fun way for people to visually rank their financial responsibilities."
What is your number-one financial priority? Is it establishing an emergency savings or having a budget? Is it more important to calculate how much you will need for retirement or write a will? In a head-to-head matchup, how does performing a regular financial checkup stand up against having a debt-payoff plan? Using rankings from more than 300 financial experts who logged on to www.financialfour.org here is the 2012 Financial Four:
1.) Live Within Your Means. Not surprisingly, this is the top choice among financial advisors. Spending less than you earn and living within your income range is the best way to ensure meeting your financial goals.
2.) Protect Yourself with Adequate Insurance. Financial security comes with having adequate insurance coverage in place for health, disability, long-term care, auto, homeowners' and renters' to protect yourself and your assets.
3.) Build an Emergency Savings. Prepare for the unexpected by having a reserve. A reasonable amount—as little as $500—will help springboard you toward a goal of having six to nine months worth of income. Your tax return may provide a great way to start!
4.) Establish Life Insurance for Wage Earner(s). Having a policy in place to cover six to 10 times your gross annual income will ensure financial security for your loved ones if you are not there to provide for them.
About the National Endowment for Financial Education (NEFE)
NEFE is a nonprofit foundation that inspires empowered financial decision making for individuals and families through every stage of life. For more information, visit www.nefe.org.
Sidebar: Financial Four Complete Rankings
- Live within your means
- Protect yourself with adequate insurance
- Build an emergency savings account
- Establish life insurance for wage earner(s)
- Understand short and long-term goals
- Communicate with family
- Know amount of debt/have a payoff plan
- Ensure job security
- Perform a regular financial check-up
- Spend less than a third of income on housing
- Have a will/financial and health-care power of attorney
- Know your partners' financial personality
- Pay yourself first
- Take advantage of savings programs available at work
- Calculate what you will need for retirement
- Understand the time value of money
- Experience change before it happens
- Spend wisely
- Understand financial terminology
- Save at least 10 percent of what you earn
- Make tax time financial planning time
- Understand investing risks vs. returns
- Budget for anticipated holidays/celebrations
- Understand income
- Use credit responsibly
- Manage service providers
- Understand and take advantage of workplace benefits
- Prepare a financial emergency kit
- Protect financial documents
- Track spending
- Keep up on maintenance
- Pull credit report
SOURCE National Endowment for Financial Education