Every household needs an emergency fund to see them through financial disasters, such as losing a job or a major illness.
Many financial experts say a six-month cash reserve is the minimum. The fund should be sufficient to pay all of your major bills (food, housing, medical and so on) for six months. If the problem may take longer than six months to resolve, the emergency fund will buy you some time to make adjustments in your lifestyle (less expensive housing, cars and so on).
The fund should be perfectly safe from loss, which means bank CDs or other secured funds - absolutely none of your emergency fund should be in the stock market (mutual funds or individual stocks).
Make Your Wishes
Every family should have a will, especially if you have children or other dependents. In addition, if you own real estate or valuable assets, a will can clear any confusion. Estate laws vary from state to state, so it is important to connect with a professional who can prepare your will appropriately. Not only do you need to let your survivors know your wishes, but also a well-prepared will can spare them additional financial burdens and costly legal proceedings.
Retirement planning is not something you should put off until later in life. Start with your first job as an adult and when the time comes, you'll be much better prepared for the financial needs of retirement.
However, no matter your age, retirement planning is an important part of putting your finances in order.
Stocks will figure into your retirement plans, but there are some beginning steps. If your employer offers a retirement plan, that is the place to start. If you do not have access to an employer-sponsored program, look into the other options such as annuities.
Funding a retirement program should come before investing in stocks outside of such a program.
Short Term Financial Goals
Short-term financial goals are those you hope to accomplish in five or fewer years, such as saving for a down payment on a house, new car and so on. The stock market is not the right place to save for short-term goals.
Protect Your Assets
Insurance protects you from catastrophic losses, whether it's your house, your income or your life.
It doesn't make sense to work hard accumulating assets only to lose them all in a disaster.
Property insurance, including home and vehicles; health insurance, life insurance and disability insurance all protect you from their respective disasters.