explain the anwser

Question

The correct order for saving should be _____.
Anwser is : pay off credit debt, emergency fund, retirement

Answer 1

This answer refers to the recommended order in which individuals should prioritize saving their money.

1. Paying off credit debt should be the first priority because high interest rates on credit cards can accumulate quickly and hinder financial progress. It is more financially beneficial to pay off high-interest debt first before other types of saving.

2. Building an emergency fund is the next step, as unexpected expenses can arise at any time. Having an emergency fund can prevent individuals from going into debt when faced with unforeseen circumstances like medical emergencies or job loss.

3. Saving for retirement should be the final step, as it is important to ensure financial security during the later stages of life. By prioritizing retirement saving after paying off debt and building an emergency fund, individuals can work towards a stable financial future.