To Build an Emergency Fund
No matter what, you need to have an emergency savings account. Recent times have taught us how important it is to have some money stashed aside for when disasters hit.
Think about it. If you don’t have any funds to help you over a period of unemployment, how are you going to take care of essentials? If you’ve reached the end of the rope then you’ve got two choices, going into debts or digging into your savings accounts. Let’s not forget that doing the latter could come with massive penalties.
How much you need to save largely depends on your everyday expenses, but most experts say you need to save up for an average of 9 months, more if you’re able to do so without derailing your other financial plans.
When Paying Off Student Loans
Having student loans hanging over your head is never easy. Like any debt, it’s best to get rid of it as soon as possible. The sooner you do, the faster you can focus on saving for a home, your retirement, even starting a new business venture with what you’ve learned in school. This goes for both younger people and older- hey remember, you can go to school at any age!
Once you’re finished paying you don’t have to change your lifestyle either. The same amount you’ve put towards your debt can now go into your other savings.
