DO YOU REALLY NEED an emergency fund equal to six months’ living expenses? Partly, that’s a matter of personal preference and hence how much you need to set aside to feel financially secure. But you should also give some thought to your job situation.
While you might tap your emergency fund to pay for a major car or home repair, the No. 1 reason to have an emergency fund is to cover a prolonged period of unemployment.

YOUR PLAN FOR financial emergencies might have four components: a cash reserve, credit lines, a Roth IRA and low fixed living costs.
One rule of thumb says that, as an emergency reserve, you ought to keep six months’ living expenses in conservative investments, such as a savings account or a money-market fund. This can be a heap of dough. For instance, if you make $75,000 a year, you might need to set aside $25,000 to cover your living expenses for half a year.

WHILE IT PROBABLY isn’t necessary to track every dollar you spend, there is value in knowing one key number: How much of your monthly spending goes toward fixed costs.
We’re talking here about the total monthly amount devoted to items such as mortgage or rent, property taxes, car payments, insurance premiums, student-loan payments, utilities, internet access, phone and groceries. Given enough time, you could probably trim these fixed costs and, indeed, that might be necessary if you simply can’t save enough for your various goals.

WHERE DOES ALL OUR money go and is our spending making us happy? Here’s how to find key statistics:

How do American families spend their money? You can find out by looking at the Consumer Expenditure Survey from the Bureau of Labor Statistics (BLS). Housing accounts for roughly a third of spending, including not just mortgage or rent, but also utilities, property taxes, furniture and appliances. Meanwhile, transportation eats up around one-sixth of spending.

GOT A LARGE SUM to invest in the stock market? Pulling the trigger and making a big purchase can be frightening. After all, the S&P 500 suffered a 49% price drop during the 2000-02 bear market, plunged 57% in 2007-09, tumbled 34% in early 2020 and fell 19% in calendar year 2022. What if you made a big purchase—and the market suffered that sort of loss?
That prospect is enough to paralyze many investors.

MANY INVESTORS GROW exuberant as share prices climb and fearful when they tumble. But to be a successful investor, you need to reverse those feelings, so you stand pat during market declines and, better still, seize the opportunity and invest more. That’s tough to do—but these strategies may help:
Before selling stocks, talk to someone. That someone might be your spouse, a friend or colleague. Don’t just talk about why you are fearful now.

IF YOU DIDN’T HAVE at least a few thousand dollars, it used to be tough to get started as an investor. Not anymore. Here are some low-rent ways to ease into the markets:
Fund that 401(k). If you’re in your 20s, there’s a decent chance your first foray into investing will be through your employer’s retirement plan. That’s a great place to start, and not just because of the tax benefits and any matching employer contribution.

AS YOU LEAVE COLLEGE and enter the work world, money will likely loom large—or, to be more precise, the lack thereof. Still, don’t let a modest paycheck deter you. With the right steps, you can put yourself on the fast track to achieve two of life’s most important financial goals: buying a home and retirement.
Live beneath your means. As you consider what sort of place to rent and what other expenses to take on,

WHILE MOST OF US have four key goals—retirement, college for the kids, owning a home and protecting our family—that leaves plenty of room for interpretation. The house your colleague dreams of owning is no doubt different from the one you’re yearning for.
That is both good and bad. It’s good because, if we can visualize our goals in great detail, we’ll be more motivated to make the necessary sacrifices to achieve them. It is worth spending considerable time pondering our goals,

THERE’S SOMETHING compelling about numbered lists. One day, maybe we’ll even draw up a list of the “Top 10 Reasons Lists Are So Popular.” But for now, you’ll have to make do with the lists below.

31 Rules of the Road
45 Steps to Success
Seasoned Investor
Where Money Grows Up
10 Questions to Ask
Favorite Websites
The Right Portfolio
Say This to Them
51 Things Not to Do
Troubling Signs
Unheard Of
People Count
50 Shades of Risk
Fooled You
10 Key Decisions
Wisdom That Isn’t Wise
Take It to the Limit
Jonathan on Happiness
10 Headscratchers
That’s Rich
Connecting the Dots
A Happier Life
Did I Say That?

Probate. This is the legal review process, overseen by the local probate court, which occurs after your death. It’s designed to ensure your assets are disbursed according to your will or, if there’s no will, according to state law. Not all assets pass through probate, including assets held jointly with right of survivorship and retirement accounts with beneficiary designations.
Right of survivorship. If you own a house, car or other property jointly with right of survivorship,

Credit report vs. credit score. A credit report brings together details about your financial life. Many of those details relate to various ways that you’ve borrowed, such as mortgages, car loans and credit cards. A credit score is a measure of your creditworthiness based on the information in your credit report.
Debt ratios. This is the amount you pay to service your debts each month as a percentage of your pretax monthly income.

Payroll tax. The Social Security and Medicare payroll tax is 15.3% of earned income. Half is typically paid by employers and half by employees, though the self-employed have to pay the entire amount. At higher income levels, workers get some relief from the portion that pays for Social Security, which is 12.4% in total, with 6.2% coming from employees. The Medicare portion—2.9% in total, with 1.45% coming from employees—is levied on every dollar earned.

Real vs. nominal. A nominal increase or decrease is an actual percentage change, without any adjustment for inflation. A real increase or decrease is the change after adjusting for inflation.
Dilution. As a company sells additional shares or compensates employees with stock, existing shareholders see their stake in the company diluted. Dilution also occurs at the macroeconomic level. As new companies spring up, existing corporations—and their shareholders—can see their claim on the economy’s profits diluted.

Time horizon. This is the length of time that your money will be invested, before you need to convert your investments back into cash to pay for your goals. The longer your time horizon, the more risk you can potentially take. Some goals, such as saving for a house down payment, have hard deadlines, with all money needed on a particular day. Other goals, like investing for retirement, involve softer deadlines, because you’ll spend the money saved over time.