- Joined
- Feb 3, 2016
- Messages
- 43,134
- Reaction score
- 16,114
- Gender
- Undisclosed
- Political Leaning
- Libertarian - Right
So I was talking with my wife, who played an episode from some podcast and they said something that just doesn't make any sense to me.
They say that you're supposed to first build up a nest egg/emergency fund of 2-3 months, in a high yield savings account, and then you pay off high interest credit cards. That doesn't make sense to me. Money is fungible. To me, the "emergency fund" could be either saved up money or a credit card. Now, unless your high yield savings account isn't making you more money than the interest that you're paying on your credit cards, why would you do that over the credit cards?
It should be credit cards first, then the emergency fund, imo. What am I missing?
They say that you're supposed to first build up a nest egg/emergency fund of 2-3 months, in a high yield savings account, and then you pay off high interest credit cards. That doesn't make sense to me. Money is fungible. To me, the "emergency fund" could be either saved up money or a credit card. Now, unless your high yield savings account isn't making you more money than the interest that you're paying on your credit cards, why would you do that over the credit cards?
It should be credit cards first, then the emergency fund, imo. What am I missing?