Pay down debt or build emergency fund?

We are currently a one-income + side-work-while-going-to-grad-school family (2 adults, kids are 9 and 11). We have about one month of expenses in an emergency fund. We have about $4k of credit card debt (about half is on a zero interest CC), a mortgage, student loans, and - surprise! - we had to buy both a car and a fridge last week. We put several hundred per month towards our credit cards and several hundred into savings. Would you continue in this vein and build up your emergency fund to 3+ months, or would you leave the emergency fund at one month and pay down consumer debt more aggressively? 

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  • That's a great question,  Marisahowardkarp !

    Here's how to think about that: you want to have enough in savings that, should something happen, you don't have to go back into debt to deal with it. 

    Some people can get into trouble with dealing with their debt too quickly. The debt is gone, but so is all your cash. Set aside enough of an emergency fund to feel comfortable, fill up your , then make a debt plan. And keep an eye on your Age of Money - grow that number and you know you're more secure.

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