Phases of personal finance to break down the financial crisis.

The phases to over come economic crisis. In the Covid-19 and after the Covid-19 the people have to face a lot of crisis an economic crisis is their brutal rival. Many have many for a lavish life and some not have enough to eat in developing and under-developing countries some own their private jets and some don't have homes for their shelters so it is necessary to study and adopt some plans to deal with economic crisis which we are going to discuss below 

 From 0 to 1

This is where the majority of people are stuck 

In this stage, you are living paycheck to paycheck 

Barley having at least one month of expenses covered

Your goal in this stage is to build a big enough gap to have a least 1 month of expenses covered

That might mean: 

• Eating out less

• Not buying those new shoes 

• Canceling unused subscriptions    

Do whatever it takes

Making progress 

Now you are building a money mind 

You have at least 1 month covered and are feeling great 

This is where you kick it into overdrive

Your next goal is to save 6 months of expenses...  

Yes it may sound impossible but it's not when you break it down 

Create a budget, in simple terms: 

1. Track money in 

2. Track money out 

3. See where you can improve

You're almost at the peak

You now have 6 months of expenses covered 

You are feeling like a kid on Christmas morning 

How could it get any better?

Spoiler... It does 

Rule #1: 

- - > Don't touch your savings 

Rule #2: 

- - > It's time to invest

Everything that you have been putting into your savings will now go towards investing 

First and foremost you must educate yourself on the stock market 

I invest in the S&P 500 but this is your money so do as you see fit

You made it to the top 

In this phase, you have more than enough cash and investments to cover your cost of living

This is Financial Freedom

We all aspire to reach this level (myself included)

Phase 4 will not happen overnight 

It takes discipline, consistent contributions, patience and many years of compounding 

If you have made it this far I have no doubt you will eventually get there

Which phase are you in?

Let me know in the comments

Good luck and happy investing!