How much emergency savings should you keep while paying off debt
In today's economic climate, balancing debt repayment with emergency savings is crucial for financial stability. Many Americans are facing increased financial pressure due to rising inflation and high credit card interest rates. A recommended approach is to maintain a starter emergency fund of $1,000 to $2,500 while focusing on paying down high-interest debt.
- ▪Americans are experiencing financial and emotional stress due to rising inflation and high credit card interest rates.
- ▪A common recommendation for emergency savings is three to six months of living expenses, but those in debt repayment may benefit from a smaller fund of $1,000 to $2,500.
- ▪Having a small emergency fund can help cover unexpected expenses without derailing debt repayment efforts.
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Sponsored MoneyWatch: Managing Your Money How much emergency savings should you keep while paying off debt? We may receive commissions from some links to products on this page. Promotions are subject to availability and retailer terms. .chip { background-image: url('/fly/bundles/cbsnewscore/images/chip-bgd/chip-bgd-moneywatch.jpg'); } By Angelica Leicht Angelica Leicht Senior Editor, Managing Your Money Angelica Leicht is the senior editor for the Managing Your Money section for CBSNews.com, where she writes and edits articles on a range of personal finance topics. Angelica previously held editing roles at The Simple Dollar, Interest, HousingWire and other financial publications.
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