One: Positive Income Flow

The most basic building block for creating MoneyPower is having positive income flow: You must earn more than you spend. The concept sounds simple but many individuals need a clearer picture of their expenses and spending habits. MyMoneyPower helps you identify your spending patterns and take steps to manage your money and expenses so that you have extra cash each month. Positive Income Flow is the most important of the five financial fundamentals and provides the resources needed to address the other fundamentals summarized below.

I spend more than I earn each month
I spend about as much as I earn each month
I have a cushion of $100 - $200 each month
I have a cushion of more than $200 each month

Two: Control of Short-Term Debt

To maximize the benefit of MoneyPower, you must make sure it's not eroded by interest on short-term debt. Over-reliance or misuse of credit cards and short-term loans can create a draining cycle of debt payments. Use the MyMoneyPower Program to learn the best way to reduce or eliminate short-term debt and begin paying down credit card balances to zero each month.

My credit card balance is higher than 3 months' income
My credit card balance is higher than 2 months' income
My credit card balance is 1 month's income or less
I pay off any credit card charges each month

Three: Protection from Serious Risks (Disability, Illness, Death)

Good money management is a lifelong process. Along the way, unforeseen events can occur that have disastrous financial consequences. The three main risks that you should protect against are loss of income due to disability, financial stress due to critical illness, or death of a family member. Your employer's benefit programs might help protect you and your family against some of these risks. Through the MyMoneyPower Program you can get help evaluating your employer-provided benefits and coordinating at-work coverage with personal insurance protection.

I have no protection against these risks
I have some protection against these risks
I have good protection against these risks
I am completely protected against these risks

Four: Prepare for Rainy Days

When the roof leaks or the refrigerator breaks, you need to have some reserve savings to meet these everyday setbacks. Ideally should keep several months income in a savings account for emergencies. You may want to set up an automatic deduction into a savings account at the bank or credit union of your choice.

I do not have a savings account
My savings account has less than 1 month's income
My savings account has 2-3 months' income
My savings account has more than 3 month's income

Five: Providing for Income Later in Life

It's easy to think about today's needs, but you must also provide for your financial needs later in life. A structured savings program that starts now - whatever your age - is the key to meeting your future needs. Tax-deferred savings plans, such as 401k or 403b, are a smart way to save for the future.

I have no long-term savings
I have some long-term savings, but no set strategy
I contribute at least 7% of income to a savings plan
I contribute at least 10% of income to a savings plan