Five Foundations
By: Jessica Vander Koy & Zachary Bednar
Set up an Emergency Fund
Your emergency fund should be at least $500 for teens and $5,000 for adults. The purpose of an emergency fund is to prepare you for unexpected expenses. Setting up your emergency fund is the first thing that you do when following the five foundations.
Get Out of Debt
Getting out of debt is the second Foundation. It allows you to begin to save money and build wealth.
Pay Cash for Your Car
By paying cash for your car, you eliminate credit interest and the chance of debt. This is the third step when following the five foundations.
Pay Cash for College
Similar to the third foundation, paying cash for college will eliminates credit interest and lowers the risk of debt. This foundation is one of the most challenge because of the high cost of college.
Build Wealth & Give
After completing the prior foundations, you will finally be able to start building wealth. Accumulating wealth allows you to give back to the community and others in need.
Overview
Overall, following the five foundations will help you get your life on the right track, money wise. The five foundations are simple beginners steps that will make a big difference, especially in your bank account. Setting up an emergency fund, getting out of debt, paying cash for your car, paying cash for college, and building wealth and then giving are the key components to successfully living and avoiding any financial problems.