We sold our home and now my wife wants to build an emergency fund instead of paying off debt — which is right?

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RegExp("[?&]notifications=1(&|#|$)");"desktop"===y&&i&&b.test(window.location.search)&&(i.checked=!0)};be("ybar-mod-notification",(function(e){var t={isUH3:"crunch"===e.getConfig().ytheme,notifContainer:document.getElementById("notification-container"),notifBadge:document.getElementById("notif-badge"),notifMenu:document.getElementById("ybarNotificationMenu"),notifMenuOpener:document.querySelector("#ybarNotificationMenu + label"),notifDropdown:document.getElementById("notifDropdownContainer"),tooltipContainer:document.querySelector(".".concat(Vn)),notifLabel:document.querySelector(".".concat($n))};t.notifDropdown&&ro(e,t)}))}()}};]]>Vawn HimmelsbachMon, Jul 28, 2025, 12:15 PM 5 min readImagine a situation where a couple, whose house was paid off, decided to downsize and — after paying for a new, smaller house — has about $50,000 left over.Deborah’s husband, Pete, wants to pay off their $50,000 credit card debt, but Deborah wants to put the money in a high-interest savings account (HISA). Both are working, have benefits and have 401(k)s with employer matching.However, because they put their extra money into paying down their first house, they don’t have other savings. Other than their credit card debt, they don’t have other high-interest debt, don’t have kids and don’t anticipate making any major purchases in the next few years.Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's howI'm 49 years old and have nothing saved for retirement — what should I do? Don't panic. Here are 6 of the easiest ways you can catch up (and fast)You don’t have to be a millionaire to gain access to this $1B private real estate fund. In fact, you can get started with as little as $10 — here’s howMany financial planners would advise paying off the debt. “If you have credit card debt that is increasing and you’re paying high interest, you definitely want to pay that off first,” Stuart Boxenbaum, president of Statewide Financial Group, told CBS News.Personal finance expert Dave Ramsey would agree — for the most part. He recommends what he calls the 7 Baby Steps, which starts by saving $1,000 in a ‘starter’ emergency fund and then paying off non-housing debt.From there, he recommends building a more substantial emergency fund (saving three to six months of expenses) and then investing 15% of your income for retirement.In the case of Deborah and Pete, the advantage of paying off their credit card debt could mean saving thousands of dollars in interest.Consider that the average credit card interest rate in the U.S. is 24.33%, according to LendingTree. On a debt of $50,000, interest starts adding up fast if you’re only making minimum payments.The downside? They’d temporarily reduce liquidity. If they put the money in an interest-bearing account, they’d have full access to that cash if they need it.However, the rate on a high-interest savings account is currently around 4%, so even doing some simple math shows that the annual percentage yield on a HISA won’t outpace credit card interest.Rod Griffin, senior director of public education and advocacy at Experian, told CNET that “paying off debt and saving money doesn’t have to be all or nothing,” and that consumers “can and should do both.”Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoS&P Futures6,440.50 +15.50 (+0.24%)Dow Futures45,150.00 +66.00 (+0.15%)Nasdaq Futures23,523.25 +102.00 (+0.44%)Russell 2000 Futures2,282.80 +11.50 (+0.51%)VIX15.18 +0.25 (+1.67%)Gold3,337.20 +1.60 (+0.05%)PortfolioSign in to access your portfolioSign inTop gainersFIX Comfort Systems USA, Inc. 688.74 +125.91 (+22.37%)LYEL Lyell Immunopharma, Inc. 12.42 +2.01 (+19.31%)GNTX Gentex Corporation 27.42 +3.82 (+16.19%)NEGG Newegg Commerce, Inc. 34.31 +3.60 (+11.72%)DECK Deckers Outdoor Corporation 116.85 +11.91 (+11.35%)Top losersLBRDA Liberty Broadband Corporation 70.06 -16.58 (-19.14%)LBRDK Liberty Broadband Corporation 70.22 -16.53 (-19.05%)CHTR Charter Communications, Inc. 309.75 -70.25 (-18.49%)SNV Synovus Financial Corp. 49.61 -7.11 (-12.54%)PNFP Pinnacle Financial Partners, Inc. 91.56 -12.60 (-12.10%)Most activeINTC Intel Corporation 20.70 -1.93 (-8.53%)TSLA Tesla, Inc. 316.06 +10.76 (+3.52%)NVDA NVIDIA Corporation 173.50 -0.24 (-0.14%)LCID Lucid Group, Inc. 2.9200 -0.0700 (-2.34%)WBD Warner Bros. 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