Lesson 1: Create a Budget (Baby Step 1)
1. Gazelle Intensity: Aggressively pay off debt and save.
2. 50/30/20 Rule: Allocate 50% for necessities, 30% for discretionary spending, and 20% for savings and debt repayment.
3. Prioritize needs over wants: Distinguish essential expenses from discretionary spending.
Lesson 2: Debt Snowball
1. List debts: Prioritize debts by balance and interest rate.
2. Pay minimums except for first debt: Focus on smallest balance or highest-interest debt.
3. Eliminate debt: Celebrate progress and momentum.
Lesson 3: Build an Emergency Fund (Baby Step 2)
1. Save $1,000: Cover unexpected expenses.
2. Avoid debt traps: No credit card debt or high-interest loans.
3. Grow fund: Gradually increase savings.
Lesson 4: Invest for the Future (Baby Step 3-5)
1. Retirement accounts: Max out 401(k), IRA, or Roth IRA.
2. Tax-advantaged investing: Utilize tax-deferred accounts.
3. Diversify investments: Stocks, bonds, and real estate.
Lesson 5: Maintain Momentum
1. Automate finances: Set up automatic transfers.
2. Avoid lifestyle inflation: Direct excess funds toward savings and debt repayment.
3. Stay accountable: Share financial goals with a partner or friend.
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