1. Pay down debt

First thing you need to do is pay down your debt. The less you owe each month the more potential you have to save or invest. The earlier it’s paid off the sooner you can invest and allow your money to compound over time. If you have credit card debt, pay it off before investing! I don’t recommend investing if you have debt with an interest rate greater than 5% outstanding.

2. Save emergency fund

To start, you should have a minimum of $1,000 in your emergency savings. Once you have paid off your debt, I recommend saving 3-6 months expenses in your emergency fund. If your job security is extremely high you could have closer to 3 months expenses. If your job security is low, I would have 6 months or more in your emergency fund.

3. Create a budget

If you are not tracking your spending, you are likely underestimating how quickly day-to-day expenses can add up. There are plenty of online tools that can help you track your budget. You can even make a simple spreadsheet to track your spending. Understanding how much you take in each month and where it is spent is a crucial step to understanding your personal finances.

4. Live below your means

Once you have documented where your money is going it is easier to identify areas that you may be overspending. Once you do that you can find areas where you can cut back on spending. The end goal is to grow your net worth and spending sensibly will put you on the right track.

5. Put money into retirement plan

Once debt is paid down and your emergency fund is established, I recommend savings 15% of your income. Typically, people save and invest through their 401(k), a 403(b), a Roth IRA, or brokerage account. If available to you, a tax advantaged account is ideal. If your employer doesn’t offer one you can still start one on your own.

6. Get help from a financial professional

This way, you can evaluate your progress and determine how far along you are toward that first million. Everyone has to start somewhere and making the right decisions along the way will help you reach your goals sooner.


Past performance is no guarantee of future results. This content is for informational purposes only and not a recommendation to buy or sell a specific security. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. All investing involves risk including loss of principal. No strategy ensures success or protects against loss.