Some offers on this page are from advertisers who pay us, which may affect which products we write about, but not our recommendations. See our Advertiser Disclosure. Building an emergency savings fund is an important financial milestone.
But where should your money go once your emergency savings account is fully funded? Should you start investing? As a financial educator and a former NFCC-certified credit counselor, I've helped thousands of people answer this question.
In most cases, the answer is similar. There's a specific progression of financial moves that nearly anyone can make to increase their financial stability. If you've fully funded your emergency savings, here's where I recommend putting your money next.
How do you know if you have enough money saved for emergencies? Although there's no set amount that works for everyone, most experts agree that you should aim for at least three to six months' worth of your living expenses (not income). That said, this amount won't be adequate for everyone.
You should aim to save more than six months' worth of living expenses if you fit into any of the following categories: It's difficult to find work in your field If your emergency savings is fully funded, congratulations! As for your next steps, there's a progression of financial milestones you'll want to focus on accomplishing. Here's the best order to follow.
High-interest debt can be a major threat to your financial stability. Even if you invest in the stock market, you won't earn high enough returns to offset the interest charges. That's especially true if you have credit cards, which average 21% APR.
Extract — continue reading at the source.
