This is not professional advice. This is just where I compile my thoughts and what I learn.

Step 3: Make a 3-Month

Emergency Fund

"Before diving into investing and experimenting with my money, I think it's important to create a safety net of savings."

My first step before I start to invest money is to save enough money to have a 3-month emergency fund.

A 3-month emergency fund is a savings buffer that covers your basic living expenses for three months. It serves as financial protection for unexpected situations like job loss, medical emergencies, or major repairs. This fund usually includes costs for housing, utilities, food, transportation, and insurance.

In step 1, I chose to go with a high-yield savings account because I won’t be needing to pull out money that often from my emergency savings and because I also don’t want to be worrying about minimums and having to pay fees.

How I will save up for my 3-month emergency fund.

Figure out how much I spend each month and then multiply by 3.

Before trying to save money, I need to pay all of my necessities and see where my money is going. It’s also important to see where my money is going in case there are some areas I can cut down and save more.

Once I have an idea of my expenses in a month I will multiply that value by 3 and that will be my goal amount of savings for my 3-month emergency fund.

Find ways to cut down on costs

I am currently living with my parents which saves me a lot of money. I also cut down on going out and spending on extras.

Take a specific amount from each paycheck and put it into my savings account (which will be a high-yield savings account).

Once I have an idea of how much money I spend, I am going to choose an amount of money that I will take out from each paycheck and put into my savings account.

  • MAKE THIS AMOUNT REASONABLE AND REALISTIC

Every time I receive a check, the first thing I will do after paying my mandatory essential expenses will be to withdraw the amount I decided and put it in my savings account. Then, I can use the rest of the money on random things like eating out, clothes, and dances.

Don’t touch that money!

I am pretty much going to act like that money doesn’t exist and keep saving up until I reach my goal that would cover 3 months of my expenses.

Then comes the fun part: Learning how to invest with my money.