If you think you have your finances in order, think again. I am the best money handler I know and "Personal Finance for Dummies" still taught me a few things! It is an excellent book on personal finance, planning, insurance and investment planning.
Using this book I put together an equation which summarizes the inflow and outflow of money. It's not difficult to understand and for me helped me visualize how to best spend my money.
- (Tax Deferred Investments+Health Insurance+Life Insurance)
+ (Tax Free Dividends, Interest & Capital Gains)
- (Federal Taxes+State Taxes) this includes FICA, etc.
- (Necessary Services)
- (Car Note)
- (Unnecessary Services)
- (Taxable Investments)
+ (Dividends+Interest+Capital Gains)
- (Dividend, Interest & Capital Gain Taxes)
A lot of outs and not very many ins. But, let's break down what we can learn from this.