Should I build my emergency fund or invest first?
Recent graduates and first-time earners often struggle to choose between finishing an emergency fund, contributing to a Roth IRA, building credit, or selling existing brokerage shares to cover cash gaps. Trying to tackle everything at once without knowing how much living expenses actually cost leads to confusion over whether to split money across goals or fund them sequentially.
What people tried
Every workaround mentioned in the threads below. We haven’t tested any of them — and nobody here is claiming they worked.
- 1Stop making new investments in the taxable account until the emergency fund is fully funded
- 2Empty the taxable brokerage account entirely to reallocate funds to savings
- 3Following personal finance guidelines like the Reddit PF flowchart
- 4Estimating future living expenses based on apartment rent and friends' spending
- 5Contributing to employer 401k up to the match percentage
- 6Using an existing student credit card and paying the balance in full monthly
In their words
Unedited, grouped by where they were said, most upvoted first within each place, each linked to the thread it came from.
“I recently graduated college and got my first big girl job. I’m having a hard time trying to figure out what to prioritize, from savings to investing to even building my credit line.”source ↗
“I know typically people say 6 months of living expenses but since I’ve always lived with my parents I’m not sure how much that is.”source ↗
“Should I complete my goal for my emergency fund first and then start setting aside money for a Roth IRA, or should I try to be contributing to both at the same time?”source ↗
“I want to build my credit but I don’t know how.”source ↗
“I’m wondering if it’d be reasonable to sell my shares in my brokerage and add the $150 or so in gain to my taxes in order to put that push me closer to the emergency savings goal.”source ↗
Where this came up
People with this problem also raised
- 4How to save money for a future nonprofit tax-free
- 6How to balance saving for retirement and enjoying your 20s
- 8Why do I avoid using my emergency fund?
- 7Should I buy property or keep my money invested?
- 52How to decide whether to invest excess savings or keep them in an HYSA
- 14What funds and allocations should I pick for a new Roth IRA?