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137 | Why Safety Funds Are More Important Than Paying Off Debt
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What are you going to do with your next bonus? If your answer is to pay down debt, this episode is for you!
Today, I discuss why you shouldn’t use your bonus to pay off debt. Instead, use that extra income in a more meaningful way that will help you stop needing to utilize debt to cover unexpected (or YOLO) expenses.
Using your bonus to clear debt might give you temporary relief, but you need to understand why you are in debt to avoid being right back in debt by the end of the year. Paying down your debt should be a part of a strategic plan that is not promoted by a large bonus.
I coach my clients to use their bonuses to build a safety fund. Safety funds help you prepare for future expenses so you’re not left swiping your credit card.
Tune into hear why you shouldn’t use your next bonus to pay down debt and learn what to do with it instead:
[01:40] How paying off debt leaves you vulnerable
[03:18] Observing spending habits
[06:19] Debt pay off plan
[07:09] Build your safety fund
[10:00] Setting timelines for debt payoff
Tune into this episode of Money Files to learn why you should use your next bonus to build a safety fund.
Get full show notes and the episode transcript: https://wealthovernow.com/personal-finances-saving-financial-coach-money-coach-bonuses-extra-income-debt-payoff-budget-spending-plan-safety-fund/
Links mentioned in this episode…
Set up a call | Financial Coach Washington, DC | Wealth Over Now
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