Life doesn't always go as planned. You could lose your job, have a medical emergency or deal with a car breaking down. It's important to build yourself a safety net.
If you're not prioritizing your emergency fund, you're not saving enough. Personal-finance expert Dave Ramsey recommends starting an emergency fund even before tackling debt. The idea is that, if an emergency or unexpected big cost arises, you won't have to go into more debt to cover it.
Aim to save $1,000 right away, Ramsey says. Of course, $1,000 isn't an ideal amount to have in your emergency fund, but it can serve as a sufficient temporary cushion until you're debt-free.
Once you've paid off your debt, you can start building a more complete rainy day fund to cover the expert-recommended three to six months of living expenses.
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