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Created with Fabric.js 1.4.5 The 5 foundations Save for a $500 emergency fund Get out of debt Pay cash for your car Pay cash for college Build wealth and make it grow Emergencies are going to happen.This is the money you use for unexpected emergencies.Keep this money away from your other accounts so you don't use it for things that are not emergencies.For teenagers, emergencies might be the car has a flat tire or your cell phone broke. When you get older, it might be a pipe in the house broke or someone got hurt. Debt is one of the main reasons peoplecannot build wealth. Debt makes youuse your money on bills instead of the groceries. Debt is bad and tends to snowball and create more debt. Once debt is gone, you have more money to use for things you want. Debt is any money that you owe. So credit cards and bank loans are something you should avoid. Car payments average up to $500 a month. That is money that could bespent elsewhere on more importantthings. Car loans are a major debt. You may not get the most fancy car, but it will still work. That is 500 dollars more in your bank account to spend instead ofpaying for a brand new car the you don'tneed. Paying cash for college is hard, but taking out student loans are a debt that people pay back for the rest of their life. Savingfor college is important so you don't have to take out student loans. That is a debtthat will take years and a lot of money topay back. If you pay with your own money,you wont have to deal with all that debt later on. Once the other 4 foundations are done, you can start saving money and investingit. When you start saving and investing, your money will start earning interest. That money will start growing over the years.
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