Why Emergency Funds Should Be a High Priority

So why should building an emergency fund become a top priority? In a way, it makes financial sense to pay off student loans as soon as you land a job.

What is an emergency fund and why do I need it?

Think of it as a safeguard for when something unexpected happens, saving you from having to take out another loan or racking up on credit card bills.

How much should I put into my emergency fund?

The size of your emergency fund is a personal matter, but there are some general rules you can follow. 


Where do I put my emergency fund?

Due to its nature, an emergency fund should be liquid, but that doesn’t mean you should be hiding money in a piggy bank. It’s best to separate it from your checking or main savings account.

A high-yield savings account is a type of savings account that earns you a higher interest than traditional ones.

The more often the interest is compounded, the higher your interest becomes on your emergency fund.


What’s Next?

Once you’ve figured out the right balance between debt repayment and savings, the next step is to look at investment opportunities.

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