Rule of the Wealthy: Pay Yourself First!
If you do not have an Emergency Fund, you are setting yourself up for failure. It’s a fast way to ensure that you will be running your credit up once again when an emergency hits, not IF. Because trouble, trials, tests, etc. whatever you want to call them will come.
Those big banks will be okay. They can wait, even if it cost you a few extra dollars in interest. You build your emergency account as quickly as you can, then you can tackle the debt with the same fervor.
Those big companies get HUGE bailouts when things come tumbling down, but whose going to bail you out? So put your money away so you can take care of what is most important, your family, first.
Then go after that debt.
Now if you’re in this crisis and have a solid emergency fund and stable income, then by all means work on your debt. But if you feel like you may lose your job you may want to make sure you have at least 6-12 months living expenses (full emergency fund) before you go putting everything heavily into your debts. I’d make a plan to fully fund the emergency savings if things are volatile. And then plan out your debts to pay the minimums.
On the other hand if all is well and stable, income may even be on the rise in this covid19 situation for some people, then by all means pay your debts (making sure you have quick emergency fund and paying towards your fully funded emergency savings account).
People who already lost their jobs or laid off during covid19 should make sure they rebuild their savings first. The layoff was not even a warning, it’s an example. If people weren’t prepared the first go around, they better be prepared the next time. Covid19 only exposed that us Americans have been mismanaging our money and we all are operating with too much debt, businesses and individuals. So it goes without say, pay yourself.
The people I know who are not working, but doing just fine are always prepared for such occasions.
If you don’t build the nest, the eggs WILL fall out.