- Step 1: Save for the long term Put money aside for long-term savings. If you are working for a company, have money automatically deducted from your paycheck and deposited into your savings account.
- TIP: Save as much as you can for the future without sacrificing today.
- Step 2: Save for a rainy day Save for a rainy day. Have enough emergency money set aside to cover three to six months' living expenses. In the event of a job loss, a car accident, or large medical bills, this money will carry you through.
- Step 3: Minimize credit card debt Don't accumulate large, high-interest credit card debts. Use cash for non-necessities and pay off your card each month.
- Step 4: Live below your means Keep your expenses under control by living below your means. Set up a budget and stick to it.
- Step 5: Carry insurance Carry medical, home, and disability insurance and make sure your policies are paid up. If you have a family, purchase life insurance. Now you should be able to weather whatever the winds of fortune blow your way.
- FACT: Consumer credit card debt almost tripled from $238 billion in 1989 to $800 billion in 2005.
You Will Need
- Credit cards