Everyone wants to make smart money moves whether they put in the work or not. However, to make this possible, there are financial foundations you can build on. Let’s just say the power of baby steps. 

These steps would require discipline and a heightened level of commitment, but the best part is that it will pay off in the end. What better feeling beats having evidence to show for all your hard work? If not for anything, you can do it because of the reward for the toil and hard work. 

1. Budgeting

For a moment, picture what a road map does. It leads you to your final destination. Budgeting is the map that leads you to fulfilling your financial goals. It tracks the trajectory of your finances and monitors how they come in and go out. 

It helps to create bars of accountability around the income you earn, and you need to track your earnings and how much you spend from them. 

2. Emergency stash

Do you know what they say about saving for rainy days? You never know when rain will fall, and you need a safe place to shelter from it. 

Life is unpredictable, and sometimes it’s hard to decipher what to expect. So, when unexpected financial needs arise, you need a financial safety net to save the day. That safety net is the emergency funds you set aside. 

The duration of the rain is also unpredictable, so it’s advisable to set aside funds for about 3 to 6 months to cover you when emergencies arise. 

3. Saving

Money is sweet to own and even painfully sweet to spend. In one moment, you’re glad you have money in your account; in the next, you’re wondering where it all went. When you receive your income, you must set a percentage apart before touching it for other purposes. If not, you might become stranded when the actual income gets exhausted. 

So, you’ll do well to save for everything possible—travels, retirement, high-profile purchases, etc. This financial foundation is arguably the most common step towards understanding your finances. 

4. Investment 

A financial foundation you might want to build on is the art of investing in things that will yield returns. You can invest in stocks, bonds, real estate properties, and yourself. Yes, investing in yourself yields over time, and the return on investment could span a lengthy period.

5. Taxes

The concept of tax can be bulky and tedious to understand sometimes. However, it is one financial foundation you want to get acquainted with because taxes form an integral part of your income. So, it’s only right to understand one or more things about how it works and its impact on your disposable income. 

Above all, this piece is just a reminder that if you can learn about everything else, you can also learn about finance and related concepts.