Step 4 To A Debt-Free Life: “Create An Emergency Fund”

You may be feeling impatient to start more aggressively paying down debt, but it’s important to first create an emergency fund. If you don’t have money socked away for unexpected expenses, you’ll be tempted to use the money that’s already earmarked for your debt payments to fund this expense. We’ve all learned that an emergency or life inconvenience can come at no notice. Having some extra cash to help you get by during this time is an absolute necessity and life saver.

Experts recommend keeping three months’ worth of living expenses in an emergency fund, but you can start with a modest $1,000. Set up an automatic monthly or weekly transfer from your Dort Financial Credit Union Checking Account to your Savings Account until you have a fully padded emergency fund. This may take several months, but no worries, you can continue following the next few steps toward a debt-free life as your emergency fund grows.

By setting aside an emergency fund in a savings account you could also have the opportunity to earn dividends on that money just by setting it aside and not using it. Of course this depends on the amount of money you have set aside and how long it sits there, but it is something to look into. Dort Financial Credit Union offers multiple accounts that allow you to earn interest on both your checking and savings accounts.