Resolved Question

I am trying to start my emergency savings. For a start, I believe it says to have at least enough money to cover my rent for the next 9 months. In my case, I am only 21 years old, so I just want to have $3000 in my emergency savings account. I am in debt for about $3000 on one of my credit cards. Should I pay off my credit card first or start my savings account first, then pay the debt after?

I did it this way. At one point I had $25,000+ in debt. Now I have am debt free and have an emergency fund that will last over 6 months.

Make sure you are current on your obligations.

Pay minimum payments on your credit cards.

Put extra money into an emergency fund, your goal at this stage would be to have $1000. You need to have this small emergency fund for when unexpected things happen while you are paying off debt. It doesn't make sense to go into further debt while you are paying off debt. (plus there is a great sense of security knowing you have this emergency fund)

Once the emergency fund is established, throw any extra money at your debts.

Only after your debts are paid off should you begin to build the larger emergency fund.

You're on the right track!!