2. Have an emergency savings fund
Let’s face it — emergencies are bound to happen. And although no one expects them, everyone should always prepare for them. But stashing away emergency savings doesn’t have to derail your debt payoff plan.
Before starting to really pay off your debts, build up a small emergency savings fund of at least $1,000 for any unexpected expenses or bills that could pop up (think car repair, medical bills, etc.). This is your “rainy day” fund, or money you tap into when something unexpected happens. If you do have an emergency and need to use some money from your fund, build it up again before paying off more debt. (But, be sure to still pay minimum payments on your credit cards and other debts.)