Step 3 - Build the Real Rainy-Day Fund

BUILD THE REAL RAINY-DAY FUND

Now is the time to build a real emergency fund or rainy day fund, whatever you want to call it, FU, or opportunity fund in some cases. 

Now that we have created a budget, we know exactly how much life costs. We can now take all the expenses multiply them by three and that is how much we need for a three month fund. Multiply the expenses by six for the six month fund. 

Now, if you are in a very volatile career where you may get laid off or maybe you are in sales where the income fluctuates a bit, keep the fund closer to the 6 month mark and if you're purely on commission and a single income we might want to take that up to a full year.

A dual income family with stable jobs might be fine with only 3 months set aside. 

Now is the time to slow down, celebrate and choose your own path and become more intentional. The fire is Put out, and we can begin to build wealth!

The plan before was to get out of debt as fast as possible. Now we can stratagise and plan around life a bit. With no consumer debt eating the whole last check, we can save for a down payment, pay for schooling, get a better car, invest..... the sky really is the limit. 

Now on to the next step, maybe consider the FIRE movement? They are all about saving as much as possible and economising expenses. 

Introduction - Do not get into Consumer Debt

Step 1 - Start a Rainy-Day Fund

Step 2 - Pay off all debts except the Mortgage.

Step 3 - Build the Real Rainy-Day Fund

Step 4 - Get those investments going.

Step 5 - Save for Education

Step 6 - Pay off the Mortgage Early

Step 7 - Become Wealthy and GIVE

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