Make sure you’re in the right savings account for you.
Many people made a resolution to pay off credit cards this year. These resolutions often annually fail because people don’t plan appropriately. The goal is to pay off credit cards, but first preparing for unexpected expenses is important. Our number one suggestion is to first build an emergency fund between $500 and $1,000. If an emergency, such as a car accident or medical issue, occurs, you have money to rely on so you can avoid using your credit cards. Once you have this savings, the second best way to save is to start paying off your credit cards. You will be giving yourself a 15-20% savings rate because you will no longer be paying the interest. Now that’s Money Conscious!
For the rest of the 10 ways to save, this Kiplinger article provides a nice analysis of 8 different accounts to hold your cash so that you get some interest. Once your credit cards are paid off, increasing your emergency savings to equal three to six months’ worth of living expenses. If you already have this savings, make sure you’re in the best type of account for your plan.