Comments on: Build an Emergency Fund, Pay Off Debt, or Save for Retirement? Three Competing Goals That All Need Your Attention Today

By: Jeremy

Jeremy — Sat, 05 Jun 2010 23:00:53 +0000

Thank you for the comment, DR. I love hearing stories from readers who have gone on to improve their finances. Keep it up!

By: DR

DR — Sat, 05 Jun 2010 13:33:42 +0000

I whole-heartedly agree with the strategies Jeremy shared in this article. Before reading this article, I paid the majority of my cc debt down within a year. All my efforts went towards paying down credit cards. Needless to say, I had little to nothing in savings, and when I needed things like gas and food, I would put it back on credit cards! In hindsight, I didn’t have peace of mind with putting all my resources towards paying credit card debt because I was cash poor! For the last few months, I’ve been doing what Jeremy and SUZE ORMAN suggested…diversifying my attack. My retirement savings comes out of my paycheck automatically, then I’ve been putting the majority of my money towards building an emergency fund, and then I pay extra towards accelerating the payment of a credit card and when that card is paid off, I will roll those payments into the next one. Diversifying my money just makes the most sense for my situation because it provides me with peace of mind. Thanks for the tips and insight, Jeremey!

By: George Webber

George Webber — Sat, 21 Mar 2009 00:37:20 +0000

Good Information in this article.
I personally have chosen to solely concentrate on debt elimination. Every month my financial needs decrease, this is one of the best ways to be able to survive things like a job loss. I will be able to build a emergency fund very fast once I gotten rid of all my debt. You simply loost too much money in interest not to pay it off as fast as humanly possible.

By: Henry

Henry — Fri, 20 Mar 2009 19:53:38 +0000

Honestly, if you’re in your 20′s retirement shouldn’t be the greatest priority. Yes, you can put some $ towards retirement but you’ve probably got a lot of other concerns: student loans, car payments, rent w/ a low-paying job, buying a house in (maybe) ten years, having a kid. Something that’s going to happen in 50 years is important, no doubt, but trad. investing/emergency fund/debt payment seems a bit more pressing.

By: Chris

Chris — Fri, 20 Mar 2009 15:39:37 +0000

1. Pay off consumer debt
2. Est emergency fund
3. Invest

If you can do some combo of #1 and #2 at the same time, prima!

By: Craig

Craig — Fri, 20 Mar 2009 14:39:06 +0000

@Beth I know I should start to set up an IRA account and begin to contribute, hopefully I could get to $1000 for the year, it’s very little, but could help.

Experiences are worth investing in if you can. I am young and already have done quite a lot of traveling, and it’s like a drug to me. Already planning my next adventure, because I feel since I am young and have no financial responsibilities other than to myself, this is the best time to get some trips out of the way before life gets in the way.

By: Beth

Beth — Fri, 20 Mar 2009 14:16:44 +0000

Craig, even if you put a little towards retirement (like a $1000 a year), that’s going to have a big pay off in the long run. When it comes to retirement, even a little makes a huge difference because of the length of time it will have to earn interest.

I’ve always been the opposite — couldn’t afford travel because I’ve been saving for retirement. I’ve realized it’s time to start investing in experiences too — but finding the money for it is so hard!

By: Craig

Craig — Fri, 20 Mar 2009 13:40:19 +0000

I am young and this is something I am going through to a degree. I luckily have no debt, but also don’t make enough to really put away for retirement or for an EF. My EF right now is my vacation fund, and for me, that is important because I love traveling. It’s tough but hopefully can put away a little for retirement without it affecting my lifestyle.

By: Beth

Beth — Fri, 20 Mar 2009 12:40:05 +0000

I think Billy was just referring to the case where someone has a high credit card debt. That’s the worst kind of debit and should be dealt with swiftly.

I agree that in other cases, relying on a credit card isn’t the right course of action. I suppose it’s okay for one-off emergencies like a sudden expensive car repair, but if you lose your job you don’t know how long it will take you to find another. You’d just be racking up a big expensive debt.

I had to drawn on my emergency fund last year, so I was glad it was there. I didn’t have to borrow money from family, or rack up a large credit card debt that I didn’t know when I could pay off. It really provided piece of mind.

By: Kristy @ Master Your Card

Kristy @ Master Your Card — Fri, 20 Mar 2009 05:10:02 +0000

I disagree with billy, whole-heartedly! You definitely need an emergency fund. What happens if you lose your job? Your credit cards are maxed and you have nothing for an emergency. Sure, you could take your 401(k), but then you’re taxed and penalized and left at square one when you find another job. That sets you back significantly in terms of retirement.

Ideally you want – bare minimum – three months expenses saved up. So, contribute to your retirement accounts, contribute to an emergency fund, and then pay debt. Yes, getting rid of the debt is important, but if you’re out of a job, you’re not paying on anything without an emergency fund. The ‘it can’t happen to me’ attitude was pretty rampant on Wall Street, too. Look what happened there.