Questions and Answers for Financial Wellbeing.

Since prosperity is a component of well-being this also deserves our attention.

The definition of well-being is a good or satisfactory condition of existence; a state characterized by health, happiness, and prosperity; welfare.


I have my emergency savings in place, and am starting my “fun” account, and an additional investment account. I’m wondering if there is a ratio or % that I should keep in mind when deciding what to save and what to have fun with? Signed,  A.L.

(Note to readers, I wrote about the idea of the Fun account a while ago. You can find it here. But mainly it’s the account apart from survival needs. To be used for vacations, future projects, fun purchases, personal growth expenses like books, lectures, programs and retreats, life enhancing stuff, and of course your dreams!)


First of all, congratulations on completing one of the standards of financial health, insuring against financial risk by saving for emergencies. Things can happen, and even though we are all creating intentions for a comfortable life full of purpose and joy, change comes unexpectedly. Layoffs, auto repairs, home repairs, and other surprises present themselves. Having that 4 to 6 months of income needs set aside is such a relief when it is necessary. And just having that in an account, seeing it on a statement periodically, gives us a feeling of accomplishment. That feeling is a component of wellbeing.

Now it’s time for you to develop your own financial plan. Begin with the desired end result in mind. Don’t worry if you don’t know some of the answers right now, most likely your prosperity plan will be a living, growing piece of your life that will shift and change along with you. Your money is a representation of your efforts, desires, and goals. It will snap to your intentions as you develop confidence in this area.

First define your short-term (1-3 years), intermediate-term (up to 10 years, or to use any time before retirement) and long-term goals.


Short-term could be things like the need for new car soon, job uncertainty, year-end property taxes, etc. and the emergency fund should take care of this.

Intermediate-term could be your plans for a special trip, self-care, fulfillment and service.

Long-term, of course would be kid’s college funding or/and retirement plan and estate plan needs. Here is a nice way to calculate your retirement needs based on your income by JP Morgan. I like this one because it isn’t one size fits all. It is based on a percentage of your current income. If you’re 35 and make $50,000, according to the chart, you should have 90% of that, or $45,000 in a retirement account so far.

Your emergency, short-term account is completed, (GREAT!) that leaves your intermediate and long-term accounts to fund.

$458 a month into an IRA would max out your contribution limit. It is fully deductible if your income is under $63,000, even if you are also covered under a 401k. If this is comfortable for you, start this now. Whatever is left after your bills are paid, put in your bank savings until it is a few thousand and then invest that for the intermediate savings. If you have $1000 from your paycheck left in the bank at the end of the month, roughly half will go into retirement and half into intermediate, or FUN account.

And name them whatever you want. Get creative!

Short-term account >4 years

Essential to get this done before the Fun account
Nickname: example, Allowing for Uncertainty Account
Ideal Amount: equal to 4 to 6 months income. $50,000 income would be $16,000 to $25,000
Keep in a bank savings or money market account. When you need to use it make it a priority to build it back up.

Intermediate FUN Account up to 10 years

Nickname: example, Intentions, Dreams and Goals Account

Ideal amount: figure the cost of each dream and add them up. This is for FUN. There are no strict rules, this may be used whenever. After your IRA and emergency accounts are being funded, your bills are covered, divert your new funds to this account. Use a bank savings account, money market or short-term investments.

Long-Term Account

Nickname: True Prosperity Account

Ideal Amount: Enough to generate at least 75% of income needs. Figure on taking withdrawals of 5% from your investment account annually. For example, each $100,000 saved will produce $5,000 a year. Or use the calculator mentioned above on how much you need to be saving a year based on your income now.

Maximize your employer’s plan, at the minimum contribute the amount they will match, that’s free money!

It’s impossible to address all the details and different situations in a short answer. I hope this gives you an idea on how to begin. To fine-tune your plan, especially if you have children to educate or older parents to care for, it is always best to find an advisor you can trust to help you navigate all these circumstances.

As always, pay yourself first. Get these accounts set up and growing! As you watch them increase, your motivation will grow too! You will be financially free! And to me, that means you do what you want, when you want, and have all that you need. And you can also take the Money Map Quiz to see your strengths and next step to gain more competency financially.