Should You Build an Emergency Fund or Pay Off Debt?

Emergency Fund Vs Paying Off Debt: Which One Should You Choose?

What to Consider When Deciding Between Emergency Funds and Paying Off Debt?

When Should You Start Building Emergency Funds?

FAQs About Emergency Funds Vs Paying Off Debt

How to maintain an Emergency fund when you already have credit card debt?

Although it makes sense to pay off your "bad debts" like credit cards which carry higher interest rates, you will be drowned in more debts in immediate expenses if you do not save for emergency funds. In this case, you should pay a little more than the minimum on credit cards and save for an emergency fund.

Should I pay off my credit cards or build an emergency fund first?

Credit card debts carry higher interest rates, and you must pay compound interest for a long time if you continue paying the minimum amount each month. The best practice is to prioritise paying down significant debt while contributing small amounts to your emergency fund.

Which debt should I pay off first?

You should start paying off the small debts with the highest interest rates if you have multiple debts.