I’ve heard from a few of my friends that I should pay off my credit card debt first and then set up an emergency savings plan, since the credit card interest is biting out of my monthly income. Should I do that first or set up my emergency savings?
I’ve always been a big proponent of getting your emergency savings set up before anything else. The fact of the matter is, you never know when you’re going to need it, and spending a little extra in interest for a few months is worth it to ensure you don’t get yourself into a really bad financial situation. A lot of times we can get caught up with squeezing every penny out instead of just using common sense. Emergency savings is called that for a reason. Concentrate on that first, then work towards paying down your debt.
One of the ways you can make it a little easier on yourself is by asking your credit card company for a better rate while you’re building up your savings. At the very least they may offer you a temporary promotional rate for a limited amount of time, but even that works well with trying to get your savings set up.
Whatever you decide to do, the fact that you’re working on your financial road map is great. Opinions vary as to how you should attack your debt, so in the end you need to do what makes you the most comfortable. For me personally, I want to see my emergency savings tucked away before I focus my energies on paying down the debt. Good luck in your debt management, keep it up!
