The Five Foundations of Financial Success

Foundation One: The Emergency Fund

• An emergency fund helps cover unplanned expenses.
• $500 is a sufficient emergency fund for a high school student.
• Once you get older, you'll need to expand the fund a bit more in order to cover larger emergencies.

The emergency fund will help you maintain financial peace by making sure that sudden expenses will not take a toll on your savings fund.

Foundation Two: Getting Out of Debt

• Before you can start saving, you'll need to pay off all debts that you owe.
• During this time, there are no exceptions for impulse purchases, you must set aside money for paying off your debt BEFORE buying things.

Paying off your debt (and staying out of it) is probably the most essential part to financial success, you cannot save money until you've first paid it off.

Foundation Three: Paying for Your Car

• Always, always, always pay cash for your car.
• Don't ever buy a new car, or a car that is beyond the price for your needs.
• Often times, your parents will buy you your first one or two cars. If this is the case for you, you need not worry about this until later on.

Paying cash for your car and other big purchases will ensure that you stay debt free.

Foundation Four: Paying for College

• Make sure that you can pay cash for your college.
• Don't even think about student loans. Get a job, save up money, study hard to earn scholarships, and find the college with a price you can afford.

Student loans can be the largest setback to having success financially, which means paying cash for college could be one of the smartest decisions you'll ever make.

Foundation Five: Building Wealth and Giving

• Once you have done the other four steps, you can build up your life savings of wealth.
• Another thing you can do with this wealth is give. Giving is truly how you get the most bang for your buck.