Start Saving

“If you aim at nothing, you'll hit it every time." 
– Zig Ziglar

Initial Emergency Fund.  The first step of personal finance (“Baby Step 1") is to set a small goal of saving $500 as fast as you can (or $1,000 if your household makes more than $20,000 per year).  This emergency fund will cover those unexpected life events you can't plan for while you begin to build your financial foundation.

Full Emergency Fund.  After completing the second step of paying off your debts (see Debt Management section), the third step of personal finance (“Baby Step 3") is to build a full emergency fund of 3 – 6 months of expenses.  Your emergency fund is not an investment – it is insurance.  Do not touch this fund for purchases.

Save Cash for Purchases. After creating your full emergency fund, the next thing to save money for is purchases. Instead of borrowing money to buy something, pay cash by using the sinking fund approach. Check out these 22 Practical Ways to Save Money and start changing your saving habits today.

Learn how to save money, start budgeting, and avoid debt by requesting free access to our Foundations in Personal Finance platform. Click here to request access today.

 

 

The Norco College Financial Freedom program helps students develop financial literacy and learn healthy financial habits by providing general information for educational purposes only. Staff who meet with students provide resources and guidance on a variety of topics, but do not provide investment, legal, or tax advice. Furthermore, any links to third-party resources or services are provided as a convenience and are for information purposes only. Norco College does not endorse or approve any of the products, services, or opinions of the entities associated with these links. If you need advice applicable to your specific financial or tax situation, please consult with a professional.