Walter Updegrave is the staff expert at CNN Money, and he fields questions from those who write in to his column called, as one might guess, Ask The Expert. The latest question comes from a twenty-four year old:
My 401(k) plan will actually give me the 50 percent match on as much as 15 percent of my salary, but I’m unsure whether I should put less in my emergency account and increase my 401(k) contribution or stick with my current plan. What do you think I should do?
Walter offers great advice — take advantage of the full company match. You can’t turn free money down. Fill up the emergency cash fund next, then fill up a Roth IRA with any available savings left over.
I’m only saving 4% of my income in my 401(k) currently, but that takes advantage of the full company match. My Roth IRA comes next, and that’s being funded to the $4,000 maximum. My emergency fund is stagnant, but with all my cash accounts, it should be sufficient to cover my expenses for several months if necessary.
Updated February 6, 2012 and originally published October 24, 2005. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.