The money ladder
In shortThe order to do money in: buffer, expensive debt, emergency fund, then grow.
General information only. It isn't financial advice and doesn't know your situation.
It's hard to know what to do first. Many people follow this order, one rung at a time. Keep paying every minimum the whole way.
- A first $1,000 buffer, so a surprise doesn't land on a card.
- Clear expensive debt, like credit cards and other high interest loans.
- Build an emergency fund of 3 to 6 months of essentials.
- Then grow: your retirement account, and investing for the long term.
Why debt before growth? Say a card charges 20% a year. That costs you 20% on what you owe, every year. Paying it off is a sure saving. Growth never is.
Not sure where you are? Start with the lowest rung that isn't done yet.
In Stuffed, the Goals tab can hold every rung: your buffer, your debts and your emergency fund.
Try it in Stuffed
7 day trial on the App Store