Not only are Americans swimming in debt; they are also doing a poor job of saving for emergencies. Bankrate.com surveyed more than 1,000 households and found that 3 in 10 Americans have more credit card debt than emergency savings, the highest in nine years of surveys. So what should take precedence: saving for emergencies or paying off credit card debt? David Kilby, president of FinFit says the answer is not one size fits all.
“There is no common formula that could be applied to everyone. The first step is to understand your unique circumstances. What is the cost of your credit? How much credit do you have outstanding? What is your cash flow today? What is your disposable income? How much savings do you have and what is the cost of living expenses you can reasonably anticipate relative to a safety net account?”
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