Quick Look
- Security is the second tier of financial maturity
- Learn how to balance financial priorities
- Build your initial emergency fund
- Tackle high and medium-interest debt
Contents
Financial Security: Protecting Your Financial Foundation
Once your foundation is set, it’s time to build your financial fortress. The Security tier centers around two key concepts: preparing for the unexpected and fervently attacking the things most likely to stop you from achieving your goals. First, you need to build a starter emergency fund covering 1 to 3 months of living expenses. Secondly, you must crush your high-interest debt. High-interest debt (typically anything with a 10% APR or higher) is incredibly dangerous because so much of your payment goes toward interest instead of paying down your principal balance.
A security moat is the best way to protect your financial foundation.
What Comes Next
Working through the action plans listed below will help you stop the vicious cycle of debt and open up new financial possibilities. For example, imagine working hard to pay off a credit card, only to have a medical emergency set you back. The recommended plans in this tier help you find the balance between eliminating immediate threats and building a starter safety net. While solving for key vulnerabilities, you’ll also gain peace of mind. Securing your financial perimeter now will help you free up future cash flow and give you the resources and the knowledge you need as you transition into the Growth tier and begin building long-term wealth.
Your Next Steps: To lock in your financial security, consider the following Action Plans:
Suggested Action Plans
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- Mastering Your Money Mindset & Foundations
- Taking Control of Your Cashflow
- Securing Your Digital Identity & Credit