If you have credit card debt or a mortgage balance, you may think that paying those down are priority number one. But, if the last two years has taught Americans anything at all, it is the importance of having a six to nine months emergency fund. It is important to keep debt and expenses as low as possible and put as much as possible into a savings or money market account.
If you are trying to pay down credit card debt or a mortgage, you may not be paying enough attention to your emergency fund. If you loose your job or have to take a cut in pay, you must have money set aside for at least your housing and car expenses. Ultimately you want to be able to cover your entire budget. But having money enough to pay for housing and a car to get to work is tip top of what to do with your money.
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