I’m not sure whether I should be saving for a rainy day or paying down debt? How do you know what you should focus your financial effort on? If I’m paying $300 per month on debt reduction (credit cards and line or credit) and saving $200 every month should I focus on paying down the debt first and then work on the saving?

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Posted by Michelle (MONEY FORUMS: 2, Answers: 4)
Asked on November 8, 2016 10:25 am
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Hi Beth! Thanks so much for the reply. I’ll definitely focus on my Rainy Day fund because it’s a little low right now.

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Posted by Michelle (MONEY FORUMS: 2, Answers: 4)
Answered: November 14, 2016 10:52 am
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That depends on how much you have accumulated in an emergency savings account. Remember that is you run into trouble and need to pay for something using a credit card or payday loan, it is very expensive and you could be digging a deeper hole!

Once you have a decent balance in an emergency fund (ideally 3 months of your basic living expenses), you could then divert your savings to paying your debt down faster. Once it is paid off you can start saving for things, as your “rainy day” is covered.

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Posted by Beth Tallman (MONEY FORUMS: 1, Answers: 61)
Answered: November 12, 2016 2:04 pm