Five Financial Foundations(FFF)

learn and grow your financial needs with the FFF

Five Foundations

1. Emergency Fund

2. Get out of Debt

3. Pay cash for car

4. Pay cash for college

5. Build wealth and give

1.Set up a Emergency Fund

As a teenager you should save a $500 Emergency fund. You should use this emergency fund for surprise purchases like a new tire or a broken cell phone. You should save this fund as quickly as possible and keep it in the bank

As you get older you need to increase that fund into a full 3-6 months worth of expenses. This should be around 5,000 in a separate bank account.

2.Get out of DEBT

3.Pay cash for large purchases/cars

You should pay cash for any large purchases in order to avoid

debt which will carry over into your adult life. Another thing that you should pay cash for is a car. Instead, you should use a sinking fund which will take longer than taking out a credit loan but in the end it will pay off by not having any debt carry over into your adult life.

4.Pay cash for college

Paying cash for college may seem like a far fetched idea, but it is very much so possible. This is another expense which can be saved up for using a sinking fund. Of course it will take discipline and dedication, but it CAN be done. If you successfully manage to start saving as soon as possible you will win with money and no college debt.

5.Build Wealth and give

You can build wealth in many ways, which then enables you to give. You can do this by investing in a savings account or a sinking fund. The earlier you save the better off you will be with the time value of money. You could start by putting 100 dollars in a month at the age of 16 and stop by the age of 23, and your money will grow itself. This is how you build wealth.