The 4 Phases Of Personal Finance
Consider where you find yourself as each phase requires a different strategy.
- From nothing to something. This is where you live from paycheck to paycheck without any savings. Try to build a financial buffer of at least one month of expenses.
- Gaining traction. Once you've saved at least one month of expenses, aim for saving six months of expenses.
- Peace of mind. Put your money in a savings account and don't touch it. Everything else you save from now on is meant for investing.
- Financial freedom. This is the stage where you have enough cash and investments to cover your cost of living.
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