Emergency Fund & Deductible Snowball
A popular approach to paying off debt is something called the Debt Snowball. The idea is that you would make a list of your debts from lowest to highest and then begin to pay down debt starting with the smallest debt and working down the list. This is an excellent way to pay down debt when you need a little extra motivation to push you to achieve your debt payment goals. Those small wins along the way can help give one a sense of accomplishment and hopefully encourage follow-through. Use the Snowball for Savings I think this approach could be helpful with savings too! A widely used rule of thumb is that we should have an emergency fund that will cover 3-6 months of non-discretionary living expenses. These are expenses that are fixed and would have to be paid even in a situation where you have a loss of income. Think mortgage/rent, car notes, credit card bills, insurance ( life, health, auto, home/renter's ), food, taxes, and utilities. Saving for a 3-6 month emergency...