Photo: Harold M. Lambert/Getty Images I know I’m supposed to have an emergency fund, and I want to make that happen this year. However, I’m not really sure how to go about it. I feel like I can barely pay my bills as it is, and I’m still working my way through some credit-card debt that I built up when I first moved to New York in my early 20s . I paid off about $5K of it last year, but I have about $4K left. I also have private student loans that I’m paying at the same time.
But it’s also important to learn how to multitask with your money, and toggle between competing short- and long-term priorities. I’m not saying it will be easy or quick, but the good news is that it doesn’t have to be that complicated. Once you make a plan, you can put most of the process on autopilot — and then be patient.
In the meantime, figure out how big your emergency fund should be. The best way to do that is by examining where your money currently goes. Compile your expenses from the past few months and write them all down. Then you can see how much you absolutely need to support your basic needs — loan bills, groceries, rent, and so forth — and what you could cut if you had to. You can also try using a free budget template to make sure you aren’t forgetting anything.
Next, if you do manage to transfer your debt onto a zero-interest card and are confident in your ability to pay your whole balance in the time window you’ve got, you can pay it off and start saving at the same time. Either way, once that debt is gone, you can simply take the same amount of money that you were putting towards your credit card every month and start putting toward your emergency fund instead.
CharlotteCowles You need to actually have some kinda disposable income first!
CharlotteCowles Some people just don't have enough money. Period. We need to stop talking like there might be some clever way around it.
CharlotteCowles tax the rich, that's how.
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