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Building a solid financial foundation is completely doable. But what are the building blocks?

1. An emergency fund. When you have an emergency fund, life’s just different. What would be a major financial crisis without one turns into just a small setback instead. I prefer to have at least a year’s worth of expenses in an emergency fund, but everyone is different. The general wisdom is 3 to 6 months of expenses.

2. Commitment. Building a solid financial foundation means being committed to your financial goals, whatever they may be. If you want to retire by 40, break down what you need to do to get there and then do it. If you want to buy a house, set aside money each week for the down payment.

3. Staying out of debt, or getting out of debt if you’re in it. This means not borrowing money to begin with, or stopping with the borrowing if you’re already in debt. It also means being committed to your goals, and recognizing that a lot of debt is cultural. It’s seen as a solution, when there are better solutions out there.

4. Good habits. Having good financial habits is the most critical building block. Get this one in place and chances are you’ll rocket to the forefront financially. Good habits to have include stopping to think before you buy something, tracking your spending, and viewing things from a long-term perspective so that you set aside a percentage of your income for savings, investing, and retirement that you just plain don’t touch. Good habits can also include little things like balancing your checkbook, making it a habit to eat in, being willing to learn, or saying no when you’d rather do something else with your money or when you can’t afford something.

That’s it. Four things, and you’ll have a solid financial foundation to build on.

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