Question

Which sequence is the best financial approach?

A.) save for an emergency, pay off debts, save for retirement



B.) save for retirement, pay off debts, save for an emergency



C.) pay off debts, save for an emergency, save for retirement



D.) save for an emergency, save for retirement, pay off debts

Answer 1

Option C is correct.

Best financial approach: pay off debts, save for an emergency, save for retirement.

Explanation:

It is better to pay off the debts and then the rest of the money must be kept safe for the emergency because it is not necessary that you will have an emergency condition, it can take place or cannot take place. Then, when these two criteria are full filled then the rest of the money should be kept for the retirement.

Therefore, for the best financial approach :

`\text{pay off debt} \rightarrow \text{save for an emergency} \rightarrow \text{save for retirement}`