[Music] well hey you guys so when it comes to winning with money and Building Wealth it is a journey and a lot of us don't get there overnight so today I want to talk about the seven stages of wealth building that I consistently see people that are struggling with their money going from struggling to a lot of peace and control and ultimately Building Wealth and as we go through each of these steps you can actually see where you are in your wealth building Journey but first do me a favor and hit that subscribe button to stay up to date on all the money content that you need in your life all right the first stage of wealth building is really at ground level so the very first thing you're going to do is make sure you have $1,000 in the bank and this is your starter emergency fund and why you want to start there is because for some people maybe they have $1,000 but for 40% of Americans that can't cover a $400 emergency in cash this is a great place to start and in fact Ramsey Solutions research found that only about half of Americans have $1,000 in savings so onethird of Americans don't have any savings at all so again we see all these stats knowing that even for $1,000 for a lot of people is a really big win and so you want to have that first step be attainable and you want that first step to have a level of importance that's really crucial because if things come up throughout the next couple of steps you can always go back to that emergency fund take money out if something were to happen so you don't go deeper in debt now I want you to remember the key word here is starter so these starter emergency funds you're going to build it up later when we get to baby step three but for now baby step one is a $1,000 emergency fund baby step two you're going to start getting out of debt so you're are going to list out all of your debts smallest to largest regardless of the interest rate pay minimum payments on everything and pay off that smallest debt first what's really powerful about this is you're again getting some quick wins so that ,000 emergency fund that's your first check you feel good you're doing something you've made a goal you accomplished it and then when you pay off that first smallest debt in baby step two it does something to your confidence it reminds you that you can make progress with your money now once that is paid off you're going to take all the payments you're paying on that smallest debt roll it over to the second smallest debt and once that's paid off you have freed up the minimum payments of the first the smallest debt and the second smallest debt all of that rolls to the third smallest debt so it just keeps compounding and you're able to get out of debt that much faster and when you are debt-free it's amazing because your income is all yours then you get to decide what to do with it you get to decide if you want to give it save it spend it invest it you know you you have power again versus when you have all of these payments from you know car loans and student loans and personal loans and helocs and all of these payments going out your income then is working for other people and other Banks and not yourself so getting out of debt is really really crucial now Financial Peace University FPU is an amazing tool to help you through this process and a lot of people on baby step 2 go through FPU because it is our nine lesson course that helps you understand how to handle your money and specifically how to be debt free and how to live debt free because when you don't have any Consumer Debt in your life then you get to move on to baby step three and that is where you're going to take your starter emergency fund of $1,000 and bump it up to three to six months of expenses and so what is great about this part is you have no payments and you have 3 to six months of expenses saved in the bank so when things come up then you are able to cover so many of life's unexpected issues that are thrown at you with that fully funded emergency fund and this can be from anything from a medical scare to a job loss and when you get to this point you find a lot of Peace because you don't have payments and you have a lot of money saved which is so great now once that is complete you're going to move on to Baby Steps four five and six and you're going to do these together but before we get into that I want to tell you about a headline that I saw recently that blew my mind onethird of the US population's background info is now public so for million of us data breaches mean that our info is out there for anyone to find and this is like our names and addresses and phone numbers and so much more so that is why I love delete me because they go in and they remove your information from hundreds of data broker websites that buy sell and trade your personal data so take control of your online privacy with delete me individual delete me plans start as low as $9 a month so sign up today at join delet me.com Rachel for 20% off or click the link in the description all right baby step four is funding 15% of your income into retirement so this is going to look like Roth IRAs 401ks 403bs so just take 15% of your income and you want to put it in retirement accounts now what's great about these specific retirement accounts is they have tax advantages to them because things like the Roth ir and if you have a Roth 401k then you are able to take money out when you get to 59 and A2 years old and the growth on that account is not taxed which is huge you guys so again when it comes to investing remember match beats Roth beats traditional so if you have a 401k at work or a 403b and and your employer matches go ahead and go up to their match then take the rest of your money over to a Roth IRA and Max it out and if you do Max it out and you still have 15% of your income left go back to your 401k or 403b and put more money in but that 15% going to those tax advantage accounts like retirement accounts is so huge and so great so when you're doing that if you have kids you also want to do some investing for them so when it comes to their college and education you want to start saving for them so opening up a 529 account or an Esa which is an educational savings account are great places to start because when you are able if you are able at this step to help your kids go to college at any Financial level that is such a gift because so many college students take out debt they go through college and then they start off their financial lives in a hole that they're having to climb out of and again we just see this whole world of Education that people just feel emotionally detached in a sense because people pick out of state schools or private schools and they go to expensive institutions when they don't have the money and so they're deeper and deeper in the financial hole so if you don't have money saved and your kids are looking to go to college anytime soon you know things like a gap year is great to save up and cash flow their college after that uh even I'm going to a community college for a year or two so there's ways to get still get an education and be wise about it but if you have young kids again being able to save for their college early on is really huge and these are investments so that means that they are going to grow over time uh which again is a great place uh to put your money now after you do that so you have 15% of your income going to retirement if you have kids you put a little bit in some college funds if you have any extra margin then we recommend throwing it at your mortgage so getting your house paid off is baby step six and this is like this is the big one okay this takes on average people that are doing this plan on average 9 years now the average American has a monthly mortgage of almost $1,775 so if you could imagine that being freed up which is usually the most expensive line item in people's budget is their housing whether it's rent or mortgage uh it's incredible to think that you could take that money and give it invest it spend it I mean it frees up so much and you just own your house free and clear and when you don't have debts and you don't have a bank telling you what to do with your income again you have more options and you have more freedom but like we said at the beginning of this this is a journey okay it takes it takes a while and again on average just that one step is nine years so you want to enjoy your life during this time but any extra money you can throw at your mortgage is incredible even if you throw an extra payment a year you can pay your house off four years earlier so if you were on a 30-year mortgage then you pay it off in 26 26 years right I mean and you think about it you keep making those kind of extra payments and you get it down so quickly which is what we want for you and then once your house is paid off then you move on to baby step seven and that is where you build wealth and continue to be extremely generous so this is a process and a system to put into place but again I love this idea because there are steps there are guidelines and you can actually follow something tactically when it comes to your money because if you want to reach your goals having a system in place that helps you do that is really really important okay so as we've laid out all these steps it's good for you to pinpoint kind of where you're at and maybe what the next step for you can be because again forward progress is always important when it comes to your money and this allows you to focus on one goal at a time which again I love because I want you to see progress with your money so if you want to get started with this one of the best things that you can do in all of these steps is to budget that's because budgeting is going to help you tell your money what to do so these steps are important but the budget is the Tactical tool that you're going to use every single month to actually get the extra income to throw at the debt it's actually going to show you hey here's margin here so you're going to use that to fund your your baby step one maybe for that ,000 so whatever it looks like budgeting is so so crucial so I'll put a link to our every doll budget down below so you can check that out and if you're new to budgeting or you want to see how I do it myself then make sure to watch the next video where I show you how I would budget a $7,000 income per month or click the link in the show notes if you are listening on podcast all right you guys remember to take control of your money and create a life you love
