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Here are 7 tips for you to take care of your financial health:

1. Total Housing Payments. Your total expenses on housing payments, such as mortgage, insurance, rents and so on, should not exceed 28% of your gross income. As housing prices soared in the past years, too many home buyers broke this old rule.

2. Total Debt Payment. Your total debt payment (including mortgages, loan payments, credit card debt and all other kinds of debt that you might be paying for now) should not exceed 36% of your gross income.

3. Emergency Fund. Too many people are neglecting this one. You should keep three month’s worth of living expenses in a bank savings account or a high-yield money-market fund for emergencies. If you have kids or rely on one income, make it six months’.

4. Portfolio in Stocks. Stocks can provide good growth, but pose plenty of risks in the short-term. Bonds offer more stability. If you’re saving for retirement and want a quick idea of what percentage of your portfolio should be in stocks, subtract your age from 120.

5. Don’t put all your eggs in the same basket. In a bear market, it’s tough to find a safe-haven. A lot of stocks in your portfolio will be sinking too. But don’t compound the risk by holding too much in any one stock. Best to keep it below 10%.

6. Care for your family’s future when you’re gone. You need enough life insurance to replace at least 5 years of your salary – as much as 10 years if you have several young children or significant debts. But you might not need it at all if you have no dependents.

7. Saving for your retirement. How much you should be saving for retirement depends on a lot of things, like how much of your pre-retirement income you expect to draw each year after you quit working, how much your nest egg will continue to grow and how long you’ll live. If you are in your 20′s and you just started saving for retirement, you should be saving 10-15% of your income. People starting to save in their 30% should be saving 15-25%. Starting at 40 -45 years old to save for retirement, save 25-35%. If you are older than 45 see the table below:

The sooner you start saving for retirement, the better.

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