Holly’s correct

At least, I believe so, I haven’t gone through FPU so maybe they explain it better than from what I’ve gleaned from Dave’s books. The $1000 should be readily available so you can use it in a moment’s notice. Stuff it under your mattress. Put it behind a picture frame. Stick it in a simple, savings account at your bank. Just have it there for when you need it asap. Your 3 – 6 month emergency account could be in an ING account (which takes 3 days to access) or where ever you’d like, but it’s there to tide you over in the case of a job loss or some huge emergency, but most likely, an unexpected job loss. Someone definitely correct me if I’m mistaken, but this is how I believe it’s supposed to work.

Hope this helps :)

If you will be able to pay off the debt in 18 months, then stop the 401K contributions. BS3(when you get there) is 3-6 months of expenses. You would build up your $1500 BEF to 3-6 months. As far as BS 4, the goal is 15% of income going to retirement, including a company match.