If you can make the minimum payments on your debts, personal loans, and credit cards each month but don’t have a sizable emergency fund, this might be the year to put debt repayment on the back burner temporarily and focus on emergency fund management first. While traditional financial advisors have suggested that customers focus on reducing debts first and savings seconds, new situations have turned that advice on its ear.
With credit card reform coming in 2010 and lenders still reeling from the economic downturn last year, it is getting harder and harder for customers without great credit to get loans and credit. Some companies are actually closing down credit cards. What this means is that if you do not have an emergency fund and you lose your job, you may not be able to secure payday loans or any other kind of loan and you cannot just rely on your credit card to act as emergency money. Now, you need an emergency fund and you need to make creating that fund a top priority.