A hybrid strategic approach involves building a starter emergency fund of $2,000 while simultaneously paying down high-interest debt. This safety net prevents you from falling back into the credit card trap when unexpected expenses arise.
Keep your reserves in a High-Yield Savings Account (HYSA) to earn competitive interest. Once high-interest liabilities are cleared, pivot your focus to a long-term emergency fund covering 3-6 months of living expenses.
“Note: This is not financial advice.”