Financial advisors offer advice on building an emergency fund and tackling credit card debt.
If your resolutions include saving more money and chipping away at credit card debt, read on for expert advice about where to start. \tDiana Lozada, financial advisor for Lozada says she tells clients to start with a savings goal. 'Number one is to build a savings emergency fund .' It may seem out of reach if you’re stretching to pay bills already in your mailbox. Lozada said emergency savings tops her list for a good reason. 'There's always something,' said Lozada.
'Having that money ready, so you don't have to use credit. That's the reason that we use credit many times, for emergencies.' She said you can aside a little from every paycheck by preauthorizing a transfer directly to savings. Even with the Fed cutting interest rates, a high-yield savings account may be an option. Just be clear on the interest rate, any minimum deposit requirements and other fees. have been around 20 percent for credit cards. If you’re carrying this type of debt across multiple credit cards, there are a couple of ways to tackle it. The snowball and avalanche methods. 'The avalanche strategy is to pay the credit card that has the highest interest rate,' Lozada explained. The avalanche approach means paying more towards the highest to lowest APR while still making all the other minimum payments. The goal would be to pay less overall interest. The snowball method focuses on the smallest balance first. Lozada explained it can feel motivating to settle a debt and move on to the next one. said consumers can shop around for a balance transfer credit card. It allows you to move debt onto a card with a zero percent interest promotion for a period of time. 'If you pick a card, you're probably going to be subject to a balance transfer fee. These are typically 3 to 5% of the balance that you transfer over. So that's something to budget for,' Rathner sai
SAVING DEBT CREDIT CARDS EMERGENCY FUND FINANCIAL ADVICE
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