They will have the cash and credit they need to buy a home with ease, and will have the financial runway they need to pursue career opportunities with little risk of financial ruin. These three steps are (1) to build up an emergency fund of $1000 to $2000 (2) to pay off all “bad debts” (we define this term below) and build strong credit and then (3) to build up one year of financial runway in the form of cash or equivalents By completing these three steps, readers will set themselves up for the next phase of wealth generation, discussed in part II. There are three initial steps that should be completed, in order, for the seeker of early financial freedom to build up that one-year stockpile. You now have to decide how to deploy your rapidly expanding savings so that they extend your financial runway as much as possible.

Unlike many Americans who struggle to make ends meet, you now face a new problem. Your goal is stockpile a reserve capable of funding your frugal lifestyle for around a full year. Now, it’s time to deploy those savings in such a way as to develop your first year of financial runway. After reading those two chapters, you should understand what you need to do to put yourself in position to save thousands of dollars per month on a middle class income. “Chapter 3 What to Do with Money as You Save It Chapters 1 and 2 should have helped you understand the theory behind frugality and develop a practical plan to live on less than half your take-home pay all in the context of building up your first $25,000.

Set for life trench