the Five Financial Foundations
with Hunter Pankratz and Julie Wagner
Set up a $500 Emergency Fund
This is essential for when you have an unexpected or surprise expense, like losing your job or your car needs to be fixed. This amount should change over time as your expenses change and you get a better paying job. Your expenses may not be a lot now, but in the future it is important to have about 3 to 6 months worth of expenses for emergencies.
Get out of debt!
Getting out of debt is important. Debt causes more problems rather than fixing them, so you should make sure you pay off all your debts so its easier to save your money.
Pay ca$h for your car
If you take out a car loan, eventually you are going to be paying more than that car is worth due to high interest rates. Paying cash for your car means you can save up for a nicer car later when you go to trade in the first car. That means you have the money that the first car is worth, then the money you saved, giving you a much nicer car than the first. Get the idea?
Pay Ca$h for College
Paying cash for college is also super important. By doing this, you can avoid high interest rates on a student loan. Overall you will then be paying less for your education and not have any debt when you graduate.
Build Wealth and Give
Wealth building is important because you can make money by just putting it in an interest-bearing account. Instead of spending that money that you saved up from previous steps, you can also give to your community to help it grow.