By now, if you followed step one and step two, you have a budget that, provided you can stick to it, throws off extra cash every month.

The temptation is to start paying down that horrible debt as fast as possible.

For the long-term success of your plan, however, it’s very, very, very important to build an emergency fund first.

So before you start paying down your debt, build an emergency fund. It will be good for your mental health, for your confidence and the for long-term success of your journey to a debt-free life.