Before investing a single dollar, you need an emergency fund — cash set aside specifically for unexpected expenses: job loss, medical bills, car repairs.

Without one, any financial shock forces you to sell investments (possibly at a loss) or run up high-interest credit card debt. An emergency fund is the foundation everything else stands on.

Rule of thumb: Keep 3–6 months of essential living expenses in a liquid, FDIC-insured account.

If your monthly essentials are $3,000 (rent, food, utilities, insurance), you need $9,000–$18,000 in your emergency fund.