Emergency Fund

If you don't have a well-established emergency fund it does no good to pay off your debt because an emergency will come along and you'll need to charge the expense on your credit card; think: new tires for the car. What a bummer; it's not like you can throw a party and have your friends come over and see your new tires. The emergency fund is just for that: new tires for the car.

People get discouraged when they've established their emergency fund and then they have to use it. But, that's what the fund is for; you'll be glad you had it and you don't have to go further into debt.