parties. But it is one of the most powerful stress reducers you can put in place. When a car repair, home repair, job disruption, or medical bill shows up, you are ready.
Step 3: Clean Up Any High Interest Debt
Not all debt is created equal. A conventional mortgage at five or six percent is one thing. A credit card at twenty percent is something else entirely. Many major financial institutions and consumer education sites show that paying down high interest debt is often one of the best “investments” you can make with extra cash, simply because the “return” you get by avoiding that interest is effectively guaranteed. If your move frees up cash each month and you have any high interest balances, consider directing some of that savings to:
• Credit cards • Personal loans • Variable rate debts
Once those are gone, the same monthly dollars can be redirected to building assets rather than plugging holes.
Step 4: Pay Yourself First (On Purpose)
A concept you see often in financial education is “pay yourself first.” It simply means that before your money disappears into day to day spending, you automatically move a certain amount into savings or investments.
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