Managing your finances can seem daunting, but it really isn’t that hard, even when you include buying stocks in the mix.

Mention the word money and some people look like a deer caught in headlights. Indeed, it can seem daunting to manage all of the costs associated with living in today’s modern world. But you can do it if you step back and focus on keeping things simple.

Here’s an easy-peasy blueprint to follow that gets you all the way to investing in, hold your breath, stocks!

Set the foundation

It might seem obvious, but without income you don’t really have a financial situation to deal with at all. So, most people should focus on getting an education and then using that education to find gainful employment. It doesn’t matter what you do, per se, just as long as you have enough cash to pay your bills. That sounds flippant, and to some degree it is, but this really is the first step to a strong financial future even if it can be a difficult and time-consuming one.

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The larger problem that most people are likely to have is going to be on the cost side of the equation. It is so easy to spend money, often needlessly, that people tend to spend all the way up to, and sometimes beyond, their incomes. You have to nip that habit in the bud as soon as possible. You could do so by tracking every penny you spend and then analyze where your money is going. That probably won’t be as fruitful as you think. An easier way to do it is just pay yourself first, as the old finance saying goes.

Essentially, you automatically take a percentage of your take-home pay and save it. A good place to start is 10%, but it makes sense to try to work that higher over time. After that point, just force yourself to live on what’s left over. If you find that credit cards are too much of a temptation, leading you to overspend, start only using cash. When you run out of cash, you have to stop spending.

To keep with the cash approach, use envelopes to put money aside for regular expenses like rent and groceries. You can even allot some money toward “fun,” whatever that means for you. This is a simple way to create a budget that forces you to live within your means while also saving some money.

Make sure you have a safety net, then invest

When you start saving some money, don’t rush out and buy stocks. The first thing you need to do is make sure you can handle financial adversity. We will all face hardship at some point and you need to have the cushion to deal with it. Save three to six months worth of living expenses in a bank account that you don’t touch unless there’s an emergency (think medical bills or unexpected car repairs).

And if you have dependents (a child or non-working spouse, for example), you should look into life insurance. Term life insurance is probably going to be the lowest-cost option.

Only after you have all of that done should you start to invest in stocks. But what stocks? A lot of people simply don’t have the time or interest to learn about investing, which is understandable. You don’t have to because you can outsource that work to someone else with a mutual fund or an exchange-traded fund (ETF). Essentially, for a small fee, you are hiring someone to invest on your behalf. It is the simple solution to what can seem like an overwhelming task.

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A good option for outsourcing investing is the **S&P 500 **index, which you buy with a low-cost ETF like Vanguard S&P 500 ETF (VOO 1.06%). This ETF buys a 500-stock portfolio of large and economically important U.S. companies and you only have to pay an expense ratio of 0.03% for the service. That’s pretty close to free on Wall Street. Most investors consider the S&P 500 to be “the market.”

But only buying stocks is going to expose you to material volatility, so you should probably pair that with a bond fund like Vanguard Intermediate-Term Bond ETF (BIV 0.17%). This bond ETF owns bonds that will mature between five and 10 years and is a good compromise between risk and return, given its focus on high-quality bonds. The expense ratio is also a modest 0.03%.

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Vanguard Bond Index Funds - Vanguard Intermediate-Term Bond ETF

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If your eyes have glassed over, don’t worry. You don’t have to buy either of these two ETFs. You can just buy the Vanguard Balanced Index Fund, a mutual fund that effectively buys all U.S. stocks and bonds with a 60% stocks and 40% bond split. The expense ratio of the fund is a modest 0.07%, but there’s a minimum purchase of $3,000.

It would be well worth your effort to build that cash up in your emergency savings account and then buy the Vanguard Balanced Index Fund if you really hate the idea of investing on your own.

You will lose money and it’s OK

The thing with buying stocks is they are volatile, which is why you should also buy bonds. Bonds tend to be less volatile over time. But the big thing to accept here is that over short periods of time you will lose money in stocks. But over the long term, the overall stock market (using the S&P 500 index as a proxy) has headed steadily higher after every downturn it has suffered.

So this simple plan isn’t a one-time event. You need to keep working, keep saving, and keep investing through thick and thin. But with a safety net in place, a collection of envelopes for budgeting, and just one mutual fund you can build a simple money blueprint. And stocks should, given enough time, help you build an attractive nest egg for the future.