Baby Step #3

Ok, so you have completed Baby Step #2, all your debt except for your mortgage is paid off! Wow, what a great feeling! It's indescribable! After months or years of intense focus on paying off debt, you're done. Believe me, it doesn't sink in right away. It's a huge burden off your plate, and you will adjust.

A safe is good for some things, not your emergency fund.

Hopefully, before you finish your Debt Snowball, you have done the analysis of your situation to determine how big your emergency fund needs to be. Your fully funded emergency fund should hold 3-6 months of expenses. Do you need six months, or will three be sufficient for your situation? Where should you put your emergency? These are great questions for your financial coach to help you navigate.

Things to think about are the stability of your current position at work. Are you part of a household working from one income or two? Do you have chronic health conditions? Are you risk adverse?

I recommend holding your emergency fund in a high-yield savings account. There are numerous out there to pick from. Personally, we use Ally, which is an online bank and interest rates are comparable to other online banks. Use this link and you'll get a $100 bonus after you fund your new Ally account: https://www.ally.com/referral?code=6M3Q5Q6N3B

Keep the momentum going! Getting your emergency fund completed will only take a few months if you take what you used to put towards debt and put it towards the fund. For example, if $1,000 per month was going towards debt, put $1,000 per month towards your emergency fund and knock it out! You won't regret it and the peace of mind that it will give you is even better than when you reached zero debt.

If you still want to learn more, schedule some time with me here: https://calendly.com/smithfc1210/consultation

Have a blessed day!