April 30, 2025
86: Rethinking Your 6 Month Emergency Fund
Layoffs, inflation, and rising costs are rewriting the rules of emergency savings. In this episode, Jess & Brandon break down why the old "3-month cushion" no longer cuts it—and what you actually need instead.
You’ll learn:
- Why experts now recommend a 12-month emergency fund
- How to separate wants vs. needs when calculating your savings target
- Why investments ≠ emergency savings (and what to do instead)
- 5 practical strategies to build your fund faster—without burnout
- How to turn a daunting goal into doable milestones
Whether you're starting from scratch or leveling up, this episode gives you a clear, no-fluff plan to create real financial security in uncertain times.
Listen now and take the first step toward peace of mind and real financial freedom.
Visit prenups.com/sugardaddy to learn more about fair prenups that help couples plan for a healthy financial relationship.
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Notes from the show:
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Chapters
00:00 - Emergency Funds in Uncertain Times
04:20 - Understanding Tariffs and Their Impact
09:04 - What Makes an Emergency Fund Essential
14:27 - Why 12 Months of Savings Is Ideal
18:37 - Five Ways to Boost Your Emergency Fund
25:15 - Setting Goals and Taking Action
Transcript
WEBVTT
00:00:00.321 --> 00:00:02.548
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Already married, no worries.
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They do postnuptial agreements too.
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That's what Brandon and I did after eight years of marriage.
00:00:51.000 --> 00:00:53.304
Prices are creeping up again, and if you're already feeling stretched, this episode is your wake-up call.
00:00:53.304 --> 00:00:58.707
With new tariffs shaking the economy, now is the time to build a serious emergency fund, not someday now.
00:00:58.707 --> 00:01:11.132
In this episode we're breaking down what's really going on with inflation, why the old three-month savings rule won't cut it anymore, and five smart, doable ways to start stacking your safety net fast.
00:01:11.132 --> 00:01:14.370
Because peace of mind, that is the ultimate flex.
00:01:14.370 --> 00:01:21.224
If you've ever felt behind overwhelmed or one unexpected bill away from panic, this episode is for you.
00:01:21.224 --> 00:01:24.046
Hey, babe, what are we talking about today?
00:01:42.281 --> 00:01:47.319
Today, we are talking about our emergency funds and why we need to get them looking right yeah.
00:01:48.540 --> 00:01:50.043
Unfortunately, we are in, I would say, somewhat unprecedented times.
00:01:50.043 --> 00:01:52.230
Oh my gosh, every time somebody says that a unicorn dies.
00:01:54.400 --> 00:01:58.528
But the focus of the episode today is, as you said, on emergency funds.
00:01:58.528 --> 00:02:10.830
I would say that this is one of the first steps you should have when it comes to bettering your financial situation and I would say most people, this is the stuff they don't have in place yet.
00:02:11.600 --> 00:02:12.162
Yeah, like what?
00:02:12.162 --> 00:02:15.792
One in three Americans can't cover a $400 emergency.
00:02:16.060 --> 00:02:18.408
I think it's more than that maybe, but something around there.
00:02:18.879 --> 00:02:22.807
It's, it's sad and emergencies constantly are happening.
00:02:22.807 --> 00:02:36.409
You know, like literally remember how our parents used to be like if it's not one thing, it's another yeah, it literally is always one thing or another I mean it is never ending yeah, that's adulting, unfortunately oh my gosh, I'm so over it.
00:02:36.430 --> 00:02:51.616
It's the worst yeah, and unfortunately, with the way the economy is working now, or not working, I would say that it is actually more important than ever to really focus on making sure that you have an adequate emergency fund.
00:02:52.580 --> 00:03:00.074
Well, and not to mention, obviously, the cost of everything is skyrocketing and you can't get out of the grocery store for under $100.
00:03:00.074 --> 00:03:04.091
And then you walk out and you have two bags in your hand and you're like, wait, what did I just buy?
00:03:04.091 --> 00:03:07.173
And these are just snacks for the next 48 hours.
00:03:07.173 --> 00:03:08.639
I mean that's ridiculous.
00:03:08.639 --> 00:03:12.251
But then also just life in general.
00:03:12.251 --> 00:03:14.064
I mean the layoffs are.
00:03:14.064 --> 00:03:15.469
They just keep coming.
00:03:15.469 --> 00:03:25.594
And I mean, if you're paying attention at all, you probably have somebody in your circle who's gotten laid off, whether they're at a big company or they work in nonprofit.
00:03:25.594 --> 00:03:27.245
I mean it's just scary.
00:03:28.368 --> 00:03:40.750
Yeah, and a good portion of our country doesn't understand what the word tariff means and how it affects them personally, as far as their pockets go.
00:03:40.750 --> 00:03:41.741
All right.
00:03:41.741 --> 00:03:54.331
So the basic breakdown is is that a tariff is a tax on imported goods and, to clarify, the country that the goods are coming from is not paying the tariff.
00:03:54.331 --> 00:03:58.491
So if we're importing stuff from China, china doesn't pay the tariff.
00:03:58.491 --> 00:04:09.354
Just to clarify, the company in the US that is importing the goods from China to use in their production or to sell is the one that pays the tax.
00:04:10.219 --> 00:04:21.115
So when a company needs a part, let's say, you know, you have a company that makes phones and a piece of their phone they need to make it is imported from China.
00:04:21.115 --> 00:04:23.286
So that company pays the tariff, the tax, on that good that's coming from China.
00:04:23.286 --> 00:04:33.584
So that company pays the tariff, the tax, on that good that's coming from China, and what they end up doing is they pass down that additional cost to the consumer in the way of increasing the cost of that good.
00:04:33.584 --> 00:04:36.309
So ultimately, who pays the tariff?
00:04:36.309 --> 00:04:41.471
Us, us, as consumers of products, we are the ones that pay it.
00:04:41.471 --> 00:04:45.043
You can get upset with me if you're listening to this and saying that I'm wrong.
00:04:45.043 --> 00:04:48.329
I don't care, because this is not my opinion.
00:04:48.329 --> 00:04:50.052
This is just what a tariff is.
00:04:51.300 --> 00:04:56.173
Even if somebody is screaming it from the rooftops and saying that the country is paying the tariffs.
00:04:56.173 --> 00:04:58.384
That's simply just not the case.
00:04:58.425 --> 00:05:14.081
Yeah, if you are listening to the president who is saying the incorrect definition of what a tariff is, you are one dumb or two delusional, because now everyone knows what a tariff is at this point in time it's all we talk about it's not a debate.
00:05:14.081 --> 00:05:15.625
It's a definition of a word.
00:05:15.625 --> 00:05:16.848
It's not a debate.
00:05:16.848 --> 00:05:18.552
What it is, we know what it is.
00:05:20.103 --> 00:05:21.165
It's like all we talk about.
00:05:21.165 --> 00:05:25.978
I mean, if we had a dollar for every time we heard the word tariff in a day, we'd all be good.
00:05:25.978 --> 00:05:28.105
Yeah, we wouldn't be worried about them.
00:05:28.540 --> 00:05:39.329
You know, since we are focused on the millennials and elder millennials, you're feeling it in your pockets in pretty much everything that you buy, because, hey, the US imports a lot of things.
00:05:39.750 --> 00:05:40.492
Most things.
00:05:45.259 --> 00:05:47.668
So, for example, if you're looking to buy a home, a lot of our lumber that is used in the building of homes is imported.
00:05:47.668 --> 00:06:00.035
So when you put a tariff on a country like Canada, where a majority of our lumber is imported, now these home builders are paying more for the materials to build your house and that's going to be passed down to costing more to buy a house.
00:06:01.038 --> 00:06:03.305
And it's already so expensive to buy a house.
00:06:03.704 --> 00:06:06.653
Yeah, and the crazy thing, this is such a simple concept.
00:06:06.653 --> 00:06:11.718
The fact that there was so much debate around this is just insane, because it's a very simple concept.
00:06:11.718 --> 00:06:16.149
Yeah, a tariff has been the same since the introduction of a tariff.
00:06:18.019 --> 00:06:18.379
What do you mean?
00:06:18.379 --> 00:06:19.581
We're not changing definitions.
00:06:19.581 --> 00:06:20.182
All right, real quick.
00:06:23.944 --> 00:06:24.725
All right, real quick.
00:06:24.725 --> 00:06:30.509
I want to speak to the person listening who feels like they can't work with a financial planner yet because they're carrying a lot of debt.
00:06:30.509 --> 00:06:33.610
First of all, I see you and I need you to know.
00:06:33.610 --> 00:06:35.533
You're not broken, you're not behind.
00:06:35.533 --> 00:06:36.894
You're just in a tough season.
00:06:36.894 --> 00:06:42.577
I created something just for you because I've had people reach out who are serious about changing their money story.
00:06:42.577 --> 00:06:51.586
But the full financial planning package just wasn't the right fit yet.
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So I built a new service through Oak City Financial that's focused completely on debt reduction no fluff, no shame.
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If you want extra support while you climb out, it's $300 to get started and $100 a month.
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If you want that ongoing guidance, that's it.
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This is about helping you get unstuck, not making you feel like you failed.
00:07:11.826 --> 00:07:15.466
If this sounds like what you've been needing, go ahead and schedule a call with me.
00:07:15.466 --> 00:07:16.884
The link is in the show notes.
00:07:16.884 --> 00:07:18.466
Let's take the first step together.
00:07:24.601 --> 00:07:32.894
Why are the emergency funds, especially now, so much more important than maybe they even were 12, 18 months ago?
00:07:33.620 --> 00:07:36.310
Well, let's first start out with the definition of emergency fund.
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You know the definition of emergency fund is that you have money to handle quote unquote an emergency.
00:07:42.348 --> 00:07:52.742
So, with so much uncertainty in the economy and the US as a whole, having more money to get through the unknown, it's going to be more, it's going to be beneficial for you.
00:07:52.742 --> 00:07:55.288
So the most the easiest one we can think of is layoffs.
00:07:55.288 --> 00:08:03.329
You know, for example, having a government job it used to be you have a job for life, like, oh, you want, you want something good.
00:08:03.329 --> 00:08:06.033
Get a good government job, you'll be good to go.
00:08:14.000 --> 00:08:18.583
Not the case anymore, because you have a lot of these government agencies, any company that has some government or companies that had some government funding aspects, and their funding is being rejected.
00:08:18.583 --> 00:08:24.024
So now they're laying off a good portion of the workforce, and so the emergency fund is crucial.
00:08:24.024 --> 00:08:31.559
When it comes to experiencing a layoff, the idea is that you have enough money built up so that you can still pay for your needs.
00:08:31.559 --> 00:08:45.889
Your life doesn't necessarily have to change immediately when you're laid off, because you have this emergency fund built up so that you can pay for your rent, you could pay for your mortgage, you could pay for the things that your kids need, you could pay for the food, the pulling your table, the closing your back.
00:08:45.889 --> 00:08:47.734
That's the idea of emergency fund.
00:08:48.441 --> 00:08:51.389
And your emergency fund should be sitting in a high yield savings account.
00:08:51.730 --> 00:08:51.971
Yes.
00:08:52.039 --> 00:08:55.910
Your investments are not your emergency fund because you can't access them easily.
00:08:56.639 --> 00:08:57.664
I cannot stress that enough.
00:08:57.940 --> 00:09:05.190
And it's okay, when you need to, to use your emergency fund in the event of an emergency, because that's what you're saving it for.
00:09:05.190 --> 00:09:09.740
But, more importantly, it needs to be in a high yield savings account and it needs to be accessible.
00:09:10.623 --> 00:09:17.254
I cannot stress that enough, that your emergency fund should not be invested ever.
00:09:17.254 --> 00:09:20.932
By definition, if you're investing in, it is not an emergency fund.
00:09:20.932 --> 00:09:27.121
The idea of an emergency fund is that you have a sum of money that is not losing.
00:09:27.121 --> 00:09:37.052
You know you're not losing the principal that you put in and you could have it easily accessible, without any penalties to access accessing it, be it tomorrow or whatever you need.
00:09:37.052 --> 00:09:44.229
The idea is this is that you don't know when an emergency is going to come up, so you don't want to have it invested where potentially the market could be down.
00:09:44.229 --> 00:09:56.505
And now you know say you had $50,000 in emergency fund and you actually invested it instead of putting in a high yield savings account and the market's down and now you get 40,000, but then emergency happens and now you need money and you have less money than you put in.
00:09:57.307 --> 00:09:57.489
Right.
00:09:57.749 --> 00:10:01.806
Yes, so you need to separate your investing money from your emergency savings money.
00:10:02.466 --> 00:10:03.369
And your investing money.
00:10:03.369 --> 00:10:05.453
Is that long-term horizon?
00:10:05.700 --> 00:10:06.841
right, it's the long game.
00:10:07.363 --> 00:10:18.913
The high-yield savings that you're going to put your emergency fund in is, in the event of a short-term emergency, that you can pull from and access easily.
00:10:20.100 --> 00:10:26.833
Yeah, and normally we used to hear the rule of thumb of three to six months worth of expenses for an emergency fund.
00:10:26.833 --> 00:10:32.591
I, honestly, have always been operating on kind of more than that when I work with my clients.
00:10:32.591 --> 00:10:40.389
Now if they say I have a hard line in the sand and they want only six months, I'm not going to argue back and forth with them, but I've always been an advocate for a little bit more.
00:10:40.389 --> 00:10:46.922
And you know one of the you know, financial, uh, social media influence I wouldn't even call him.
00:10:46.922 --> 00:10:48.447
He was before social media around.
00:10:48.447 --> 00:10:56.052
So one of the finance guys, ramit Sethi, always refers to it as a 12 month war chest and the ability just to get through any uncertain times.
00:10:56.052 --> 00:11:06.162
So I am a big advocate of leaning more towards that one year because basically what it's doing is it's just giving you a longer personal runway for if something comes up that you didn't expect.
00:11:07.543 --> 00:11:14.201
And it's okay if you can't save a year's worth of savings in the next couple of weeks.
00:11:14.522 --> 00:11:19.841
Nobody's expecting that Majority of people can't do that, but again, it's better to save something than nothing.
00:11:19.962 --> 00:11:23.668
So you have to first calculate your expenses, right?
00:11:23.668 --> 00:11:33.071
I think that's really important is how much do you need to live, to pay your rent, to keep your lights on, to keep your water on, to keep the fridge stocked?
00:11:33.071 --> 00:11:35.769
How much does that cost you in a month, right?
00:11:35.769 --> 00:11:38.288
What do you pay in gas to get to work?
00:11:38.288 --> 00:11:41.188
What does daycare cost so that you can actually go to work?
00:11:41.188 --> 00:11:44.167
All those necessary expenses?
00:11:44.167 --> 00:11:50.288
Add them together so that you know this is what it costs for me, to quote unquote live, survive, thrive.
00:11:50.389 --> 00:11:58.734
In a month that does not include your spa weekend and your brunches and the soccer you know like those are nice to have.
00:11:58.734 --> 00:11:59.842
Those aren't need to have.
00:11:59.842 --> 00:12:04.744
So if you can cover those in an emergency fund, obviously that's the ideal scenario.
00:12:04.744 --> 00:12:12.000
No-transcript.
00:12:12.000 --> 00:12:14.363
Calculate all of that and then start working towards.
00:12:14.363 --> 00:12:19.923
What does that look like for a month, for two months, for three months, all the way up to 12 months or beyond.
00:12:19.923 --> 00:12:26.363
If you are in a field that is very volatile or has a high turnover, you might want 18 months.
00:12:26.363 --> 00:12:34.481
If you are a family that has a lot of expenses throughout a given month, you might want more than 12 months, right?
00:12:34.481 --> 00:12:40.230
I mean, everybody's situation is their own, but you have to run the numbers and do the math.
00:12:41.215 --> 00:12:43.960
Having a properly funded emergency fund.
00:12:43.960 --> 00:12:59.748
I cannot stress how important and freeing that can be, because even in times when there is an economic uncertainty let's just say you know jobs are booming, the stock market's booming Having that emergency fund can also allow you a lot of freedom in other areas.
00:12:59.748 --> 00:13:07.783
So, for example, let's just say the work environment that you're in has turned extremely toxic and that is bleeding over into your own personal life.
00:13:07.783 --> 00:13:16.568
You know, with your family, your spouse, your mental health, having an adequate emergency fund, I can justify that being an emergency, that you should not be working that job.
00:13:16.568 --> 00:13:23.989
And even if you don't have another job lined up, you have this emergency fund that can allow you to quit that job and get out of that toxic scenario and find another job.
00:13:24.716 --> 00:13:26.601
That's why some people call it an FU fund.
00:13:26.923 --> 00:13:27.024
Yeah.
00:13:27.414 --> 00:13:32.361
Because you can say you know F this, I'm not doing this anymore, I don't need to be in this relationship.
00:13:32.361 --> 00:13:36.837
I don't need to stay in this environment, don't need to be in this relationship.
00:13:36.859 --> 00:13:46.451
I don't need to stay in this environment and I have money to give me options because, again, it's a tool and think about how much stress a lot of people carry when it comes to the uncertain as far as like, oh, I might be laid off.
00:13:46.451 --> 00:13:48.778
I work in a sector where we do have government funding.
00:13:48.778 --> 00:13:51.525
I haven't been laid off yet, but I might be laid off.
00:13:51.525 --> 00:14:07.703
If you have that emergency fund properly funded, I think that it could alleviate not all the stress because I still think you're going to have some stress of losing your job but it could definitely alleviate a portion of it because you know that if that did happen, that you still have money to pay your bills and your life can still continue on.
00:14:07.864 --> 00:14:08.546
You have a cushion?
00:14:08.546 --> 00:14:10.015
Yes, it makes a difference.
00:14:10.015 --> 00:14:27.601
Well, let's talk about the five ways people can either boost their emergency fund, if it's something that they already have or are actively working on growing, or for the people who are like I just don't have it, like I don't know where I can find extra money, how can they get started?
00:14:27.601 --> 00:14:28.495
Let's talk about that.
00:14:28.775 --> 00:14:40.561
Yeah, I would say, with the environment that we're in, maybe you know, being more focused on the emergency fund and being a little bit more hyper aware of trying to fund it as much as you can and quicker should be a focus, and there are some ways that you can do this.
00:14:40.561 --> 00:14:43.764
So first and foremost, you know, cut your frivolous spending.
00:14:43.764 --> 00:14:44.996
You know all the stuff that you're spending.
00:14:44.996 --> 00:14:45.957
That's just fluff stuff.
00:14:45.957 --> 00:14:53.830
You know Uber Eats some of your subscription services going to the spa, stuff of that nature that are wants, not needs.
00:14:53.830 --> 00:14:58.922
Maybe cut some of those, because then that can free up extra money that you can put towards your emergency fund Right?
00:14:58.942 --> 00:15:06.134
And again, things are temporary, so you might not have to cancel that subscription forever, but maybe you do it for four months.
00:15:06.134 --> 00:15:12.293
Maybe you go down from five subscriptions for TV to one subscription, you know.
00:15:12.293 --> 00:15:16.905
Focus on the one where you watch the most and everything else you get rid of for the next six months.
00:15:16.905 --> 00:15:19.202
How much money can that put back into your pocket?
00:15:19.202 --> 00:15:23.265
What subscriptions did you mean to cancel that you haven't canceled?
00:15:23.265 --> 00:15:27.123
What free trials you know turned from free trials into?
00:15:27.123 --> 00:15:32.082
Oh, I forgot to disconnect my credit card and now you're actually paying for that service.
00:15:32.945 --> 00:15:35.409
Yeah, and I'm not saying that you have to cut everything.
00:15:35.409 --> 00:15:41.976
That's not what I'm saying, because I still believe in enjoying a certain portion of things today, because tomorrow's not promised.
00:15:41.976 --> 00:15:48.682
But you also need to be focused on what your goals are and making sure that you are prioritizing those goals that you deem to be valuable.
00:15:48.682 --> 00:15:55.586
So by cutting some of the stuff, you might even realize, hey, like I didn't even watch this streaming service, why was I paying for it?
00:15:55.586 --> 00:16:02.596
Or I don't even really miss going to do this or whatever you know, because I mean, like we don't use Uber Eats.
00:16:02.596 --> 00:16:14.144
But I am sometimes astonished and when I sit down with people, it's more, I would say, it's more single people that when I look at you know their expenses, how much they don't even realize how much they're spending in Uber Eats.
00:16:15.206 --> 00:16:18.172
I mean they, they clearly have a corner market.
00:16:18.172 --> 00:16:22.940
But the only time we use it is because we get the $15 credit on our Amex.
00:16:22.940 --> 00:16:29.029
But even then it's very, very rarely used, mostly wasted.
00:16:29.029 --> 00:16:34.803
But yeah, the added taxes, fees, delivery, I mean it, just it adds up.
00:16:34.803 --> 00:16:38.070
You know, your $10 Kava bowl is now $27.
00:16:39.155 --> 00:16:43.264
And another area is holding off on big purchases.
00:16:43.264 --> 00:16:48.466
So, for example, like if you were looking to buy a car, do you need a car or do you want a car?
00:16:48.466 --> 00:16:49.712
That's two different things.
00:16:49.712 --> 00:16:57.865
Now, obviously, if you need to buy a car because your car that you have or you don't have a car is the car that you have not working, then obviously you do need to get a car.
00:16:57.865 --> 00:16:59.107
But do you need to get a new car?
00:16:59.107 --> 00:17:01.738
You know kind of weighing those options.
00:17:01.738 --> 00:17:13.527
Or you know if you're going to do a big renovation, if you haven't already saved up money for that renovation, is this a renovation that you need to do now or could you possibly hold off to build up your emergency fund and then do the renovation on a later date?
00:17:13.527 --> 00:17:24.141
And once again, this is really coming down to prioritizing what's important, because you have to be really good at deciphering between what are wants and needs and sometimes those wants.
00:17:24.141 --> 00:17:26.615
They need to be delayed in order to satisfy the needs.
00:17:27.498 --> 00:17:27.999
What about?
00:17:27.999 --> 00:17:29.442
I'm going to push back here a little bit.
00:17:29.442 --> 00:17:32.296
What about the needs and then the tariffs?
00:17:32.296 --> 00:17:36.527
Right, like if you need a new refrigerator do I wait.
00:17:37.296 --> 00:17:38.160
Remember what I said.
00:17:38.160 --> 00:17:41.203
Okay, I said do you need something or do you want?
00:17:41.243 --> 00:17:43.702
something, so this is only for the one, correct.
00:17:43.894 --> 00:17:48.960
If you have a refrigerator that is working, perfectly fine just from an aesthetic standpoint and an upgrade standpoint.
00:17:48.960 --> 00:17:49.722
You want a new one.
00:17:49.875 --> 00:17:52.343
You're like I want the water and the ice maker.
00:17:52.343 --> 00:17:52.904
Yeah.
00:17:56.494 --> 00:17:57.785
Or I want all the computer stuff on the front of the touchscreen.
00:17:57.785 --> 00:17:58.269
That could be a want.
00:17:58.269 --> 00:18:04.782
If your refrigerator is working, fine, now obviously, if your refrigerator is broken and it doesn't function anymore, then yes, you need to buy a new refrigerator, right?
00:18:04.782 --> 00:18:12.038
So it's deciphering between those, because I'm not going to call you out, but I'm going to call you out where sometimes you were like oh, let's get this.
00:18:12.038 --> 00:18:14.460
I'm like well, we already have this and it functions fine.
00:18:14.460 --> 00:18:16.602
You just want something different of it.
00:18:16.942 --> 00:18:17.803
I want a prettier one.
00:18:18.123 --> 00:18:21.286
Exactly, which is fine as long as you have the money to pay for it.
00:18:21.286 --> 00:18:27.351
In these scenarios, I'm saying that you haven't saved up for these large ticket items, and it's a want, not a need.
00:18:27.530 --> 00:18:30.036
Right, okay, that's fair.
00:18:30.056 --> 00:18:36.808
Now the next two are going to be kind of counterproductive to what most people hear, maybe on social media.
00:18:37.009 --> 00:18:37.289
Okay.
00:18:38.758 --> 00:18:45.202
So say you have debt that you're paying down and you're making extra payments on top of the minimum payment that you have for debt.
00:18:45.202 --> 00:18:52.883
Maybe it might be more beneficial at this point in time to possibly hold off on making those extra payments, depending on what the debt is.
00:18:53.336 --> 00:18:54.981
Are you talking about low interest debt?
00:18:55.063 --> 00:18:56.778
Correct Low interest debt, so what?
00:18:56.838 --> 00:18:58.785
10% or less, 7% or less.
00:18:59.015 --> 00:18:59.497
Yeah, around there.
00:18:59.497 --> 00:19:01.362
So these are going to be things.
00:19:01.362 --> 00:19:11.205
Obviously, your mortgage, student loan, debt those are going to be the two main ones that we're looking at and maybe you somehow have a refinanced personal loan that's a low debt.
00:19:11.205 --> 00:19:16.184
Whatever it may be any of the low interest rate debt maybe you hold off on making those extra payments.
00:19:16.184 --> 00:19:21.861
So let's just say your payment is $200 and you were paying an additional $150 on top of that to get rid of it.
00:19:21.861 --> 00:19:27.859
Maybe, for the time being, that $150 would be better allocated to go into building up your emergency fund right now.
00:19:28.260 --> 00:19:30.086
Okay, so low interest debt.
00:19:30.086 --> 00:19:31.737
We want to get rid of high interest debt.
00:19:31.737 --> 00:19:38.338
That's your credit cards at 27%, right, but these are the things that are already low interest.
00:19:38.338 --> 00:19:51.242
I know we have a personal loan that's at 0%, so we're making a little bit more than the minimum payment, because I think the minimum payment is like $63 and I usually just pay 100 towards it, but it's really not on my radar.
00:19:51.242 --> 00:19:59.028
I mean, we have a plan for it, but it's not on my radar when it comes to our overall debts, because right now it's sitting at 0% interest.
00:19:59.028 --> 00:20:05.880
So you know again, you have to know what are you paying, what's the interest, and make a plan for it.
00:20:05.880 --> 00:20:07.883
We've talked about that in previous episodes.
00:20:08.675 --> 00:20:14.269
And the other area where you could possibly free up some more money to go towards your emergency fund is 401k contributions.
00:20:14.269 --> 00:20:25.625
Go towards your emergency fund is 401k contributions, so you might think about lowering the amount that you're contributing to your 401k plan and have that money go into your emergency fund, because you need to remember that the 401k plan is a long-term strategy.
00:20:25.625 --> 00:20:30.528
But what good is a long-term strategy if you can't make it through tomorrow or the next week?
00:20:31.391 --> 00:20:38.788
Now would you recommend that people go lower than their company match or try to stick with at least their company match, but nothing over.
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