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How to Allocate Your Income

Asset allocation is a critical step to investing, however it is just as important to allocate your income appropriately. How much should you spend versus save? How much of those savings should be used to pay down debt? How much cash should I hold vs invest? Below is an article that discusses how important it is to make the most appropriate decision:

http://news.morningstar.com/articlenet/article.aspx?id=818215

This is a good guide to help you begin to think about these issues, however each individual or family has unique circumstances which cause the standard metrics to be sub optimal. Comprehensive financial planning looks at this together with your goals and risk tolerance to determine the optimal plan for each individual.

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