Page 26 - Book3E

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Let’s Review__________________________________
1. Be Prepared
Create a plan using dates for specific accomplishments to complete the following steps. Record these dates along with your budget so you can track your progress.
Step 1. Create your $1,000 starter emergency fund.
Step 2. Pay off all your non-mortgage debts one at a time. (This may take quite some time, but you can consider the step completed once you have outlined specific dates and amounts for accomplishing this.)
Step 3. Build an emergency fund that will cover all your living expenses for three to six months.
2. Make a Major Family Purchase
Any financial commitment that involves a substantial portion of your money must be regarded as a major move. Business executives spend hours deciding on the use of capital, while families sometimes spend, if at all, only minutes on major decisions such as vacations, television sets, or home remodeling. The more it costs, the more time should be spent making the best possible decision. It is also important to decide what will happen if you don’t make the purchase. A financial mistake for a family can be as devastating as a financial mistake is for a
business. Hold a family meeting and make plans to accomplish a major family purchase. Ask the family to discuss the following:
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How much will it cost?
Which people, places, and things are needed to accomplish this? What will the family gain from this purchase?
What will the family lose by not making this purchase?
Measuring Your Current Progress