Build a six-month emergency fund with two months in liquid savings and four months in higher-yield accounts. Once established, use extra savings for major goals and eliminate bad debt, then shift focus to investing for financial independence.
We need an emergency fund. They say you should have 6 months of money in an emergency fund. We think at least 2 months of that should be liquid. We teach that 4 months of it could be in other places. And if you have 2 months liquid, you don't have an emergency, that other money over time can start to compound and grow. You can get to a point in life where you can use that emergency fund, becomes a wedding account, it becomes a vacation fund, it becomes something else because you did the right things with the money. And then you're going to crush your debt. You got to eliminate the bad debt, right? And then after you get rid of the debt, you want to save and accumulate money and make sure that you hit your financial independence numbers. That makes sense, y'all.
