- Introduction
- Fund Your Retirement Plans First
- Liquidity Needs
- Deposit Insurance
- Money Market Funds*
- Savings Bonds
- Emergency Funds
- Goals and Time Horizon
- Defining Risk
- What's Your Risk Profile?
- Why Take Any Risk?
- Asset Allocation
- Dollar-Cost Averaging
- Portfolio Management
- Buying Investments
- Putting It All Together
Savings vs. Investments
First, you need to understand the difference between savings and investments. Savings are funds that need to be available for your liquidity needs. They are what you will need for short-term expenses in the next couple of years, or they are your emergency funds. This money should be set aside in short-term vehicles, such as CDs and money market funds. Investments are funds that you won't need for a while. They can go into longer-range vehicles, such as mutual funds, stocks, bonds and real estate.
Emergency Funds
It is prudent to plan for unanticipated events. Things happen. Jobs end. People get sick. Children may come along unexpectedly. For those times, it is important to have a little extra money set aside. Or maybe more than a little.
How Much Is Enough?
The general financial planning rule is to have three to six months of your expenses set aside for emergencies. Your "expenses" are how much it would cost you to live if you lost all your sources of income. Figure out what a bare-bones, no-frills budget would be.
This is a general rule. How much you personally need depends on your own particular situation. For investment vehicles that will provide you with liquidity, you should consider money market funds, CDs, and savings bonds. You should also be aware of what you can do in an emergency when your liquid assets just aren't enough.
Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. Franklin Mint Federal Credit Union and Mint Wealth Advisors are not registered as a broker-dealer or investment advisor. Registered representatives of LPL offer products and services using Mint Wealth Advisors, and may also be employees of Franklin Mint Federal Credit Union. These products and services are being offered through LPL or its affiliates, which are separate entities from, and not affiliates of, Franklin Mint Federal Credit Union or Mint Wealth Advisors. Securities and insurance offered through LPL or its affiliates are:
| Not Insured by NCUA or Any Other Government Agency | Not Credit Union Guaranteed | Not Credit Union Deposits or Obligations | May Lose Value |
*The LPL Financial Registered Representatives associated with this site may only discuss and/or transact securities business with residents of the following states: NJ, PA, NY, DE, AZ, MI, FL, MD, TX, VA, GA, NC.
Financial Learning Center content created by TrueBridge, Inc. The information provided is based upon sources and data believed to be accurate and reliable. The content contained herein is intended for information and illustrative purposes only, should not in any way be construed as a personal recommendation, and should be used in conjunction with individual professional advice.
