MoneySense, David Hodges
Having three to six months of easily accessible funds set aside in an emergency fund is a nice thing to have, but it’s also quite acceptable to have a line of credit that’s only used in the event of something like a job loss, says financial advisor Cynthia Kett. “It really depends on the person. But I’d suggest a line of credit provided you don’t tap into it for other reasons like a vacation. That frees up your cash flow to be used more effectively to pay off your home or to invest in your retirement savings or your kid’s education.”
Hopefully, though, if you’re hitting the tail-end of your 30s, you’re starting to feel more relaxed with your money. The kids might be out of daycare, which frees up cash, and your improving career prospects are starting to pay off too. With your 40s just on the horizon, you’re now in a great position to stop worrying about the mortgage so much and start focusing on building up your nest egg.