Last week you learned about the Hierarchy of Wealth and it's 5 steps.
Now, we turn our attention to the base.
Step 1: Building a Solid Financial Foundation
The most important step in a wealth building structure.
The foundation of the hierarchy consists of 6 key elements:
6 Elements: Step 1 of the Hierarchy of Wealth
Money Mindset
Get Organized
Automate
Set Goals
Save 3-6 Months Expenses
Pay Off Destructive Debt
Only once you have built the first layer of your financial foundation will you be ready to move on to the next step.
Money Mindset
Having productive thoughts about money is more useful than beating yourself up over money.
Sounds simple, right?
It's not.
Everyone struggles with having the right money mindset. Changing unhelpful thoughts to ones that serve you can drastically change your trajectory.
Keep working at it. The more you flex your mindset muscle, it will pay off.
Get Organized
You need to know where your money is coming and where your money is going.
Keep a spreadsheet or use a money app like Mint.
Check all your spending once a month.
Get rid of spending that's unproductive. Think subscriptions you don't use, emotion driven binges, and "savings" that's actually over spending (like saving 40% but buying clothes you'll never wear).
Automate
Make sure all your bills are paid automatically.
This saves on the amount of time it takes to go through your budget each month.
It also removes any emotional decisions you would have to make if it weren't automatic.
Set Goals
It's hard to know when you've arrived if you don't know where you are going.
Set financial goals at least once a year.
Revisit them annually to see what you've accomplished and to set new goals.
Save 3-6 Months Expenses
You need an emergency fund.
How much can you actually live off? As in no-frills just pay the bills.
Multiply that number by 3x and start there.
Done? Repeat 1 time.
Keep your $1,000-$2,000 in an easy to access regular savings account for have-to-deal-with-this-today-emergencies.
Keep the rest in a high interest savings account. You'll earn interest and be able to access your cash in 1-3 business days.
Pay Off Destructive Debt
Debt isn't good or evil.
But unproductive debt can destroy your chances of living wealthy.
Unproductive debt is high interest debt like credit cards.
Or debt that was used on an emotional, unnecessary expense like that travel trailer you bought 3 years ago that has been sitting your driveway for months.
How do you pay them off?
Return anything you still can.
Then start with the smallest amount. Put as much extra cash as you can towards the balance each month.
Make minimum payments on everything else.
Repeat until complete.
Then What?
After you've tackled the 6 elements in the foundational step, it's time to build a safety net for your wealth.
Next week, we'll talk about the one step that most people skip.
One that could save them from 401K heartache, market crashes, and running out of money.
Check out my proven wealth building strategy. It's automated, easy to implement, and you earn guaranteed interest.
Unlike crypto or the stock market, your money doesn't fluctuate with the market. It's easy because you don't have to time to stress about what's happening on Wall Street.
You didn't become a successful business woman by following the crowd. Click the button below to get free information on how to build your wealth.
Day Lark Wealth helps women achieve their financial goals and secure their financial future.
This information is for educational purposes only and should not be considered specific tax, legal, investment or planning advice.
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