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Priority Smackdown: Should You Pay Down Your Credit Cards or Build Up Savings First?

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Pop quiz: You owe $2941 to that piece of plastic in your wallet and your savings account is exactly zero. You’ve got some money in your budget to be financially responsible each month, but not enough to attack both fronts with gusto. Now what?

We polled a few financial experts and the answer might surprise you: Prioritize savings. No, really. “There’s this assumption that you need to pay off all of your debt before you start saving, but that’s incorrect,” says Kristen Robinson, senior vice president of women and young investors for Fidelity Investments. She considers starting an emergency fund the absolute top priority—even if that means you’ll technically be shelling out more money on high-interest credit cards in the long run than if you just put every dime you had toward debt repayment.

“The math of paying interest on credit cards while you’re putting money into a savings account that’s going to earn basically nothing doesn’t seem to make sense, but it’s the best thing you can do,” agrees Katie Waters, a certified financial planner and founder of Stable Waters Financial. “If not, here’s what’s going to happen: At some point before those cards are paid off, some emergency is going to come up—your car breaks, your computer dies, whatever—and if you don’t have any money in savings, you’ll wind up charging it on your card.”

Creating some padding in your savings account—and then using that to deal with unexpected expenses—can help break the plastic habit once and for all. Another reason to favor savings: If you lose your job or have any kind of major money shake-up, there are some expenses that you just can’t put on a credit card (hello, rent!). So cash is king if you don’t want to have to rely on your social safety net, aka your parents or your best friend.

“Of course, you can pay off your debt and save at the same time,” says Robinson. We’re going to state the obvious and say: The first step to doing that is to stop using your credit card. Then hit the minimum payment due for a few months until you’ve built up enough savings to weather a small storm; Fidelity recommends three to six months’ worth of living expenses. But if that credit card balance is barely budging with minimum payments and it’s giving you anxiety, save up one month’s worth of expenses and then shift more money toward your debt repayment, suggests Waters.

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These Are the Top 25 U.S. Cities With the Lowest Cost of Living
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Coastal cities like New York and San Francisco bustle with excitement, but residents pay plenty of hard-earned cash to enjoy perks like Central Park and world-class museums—and to pay their sky-high rents. If you’d rather have a full bank account than a hipster ZIP code, consider setting down roots in America’s most affordable region: the Midwest.

Niche, a data analysis company, has ranked the 25 cities with the lowest cost of living across the United States—and the top 10 are all located in America’s heartland. Their selections were based on factors including access to affordable housing, food and fuel costs, and median tax rates, all of which were gleaned from U.S. Census and Bureau of Labor Statistics data.

Indiana was the most-represented state in the list’s top 10 section, with Fort Wayne, Evansville, and South Bend nabbing the first three spots. The remaining cities were mid-sized metropolitan areas in Kansas, Ohio, Iowa, and Illinois, all of which offer urban conveniences at a fraction of the cost of their coastal counterparts. After that, other cities in the mix included municipalities in Texas, Michigan, Alabama, South Dakota, and Minnesota.

Check out Niche's top 25 list below, and visit their website to view their methodology.

1. Fort Wayne, Indiana
2. Evansville, Indiana
3. South Bend, Indiana
4. Topeka, Kansas
5. Toledo, Ohio
6. Wichita, Kansas
7. Akron, Ohio
8. Cedar Rapids, Iowa
9. Davenport, Iowa
10. Springfield, Illinois
11. Rochester, Minnesota
12. Dayton, Ohio
13. Springfield, Missouri
14. Wichita Falls, Texas
15. Kansas City, Kansas
16. Odessa, Texas
17. Cleveland, Ohio
18. Indianapolis, Indiana
19. Abilene, Texas
20. Sioux Falls, South Dakota
21. Montgomery, Alabama
22. Lansing, Michigan
23. Des Moines, Iowa
24. Brownsville, Texas
25. Warren, Michigan

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Switzerland Flushes $1.8 Million in Gold Down the Sewer Every Year
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Switzerland has some pretty valuable sewer systems. As Bloomberg reports, scientists have discovered around $1.8 million worth of gold in the country's wastewater, along with $1.7 million worth of silver.

Scientists at the Swiss Federal Institute of Aquatic Science and Technology examined sewage sludge and effluents, or discharged liquid waste, from 64 water treatment plants and major Swiss rivers. They did this to assess the concentrations of various trace elements, which are "increasingly widely used in the high-tech and medical sectors," the scientists explained in a press statement. "While the ultimate fate of the various elements has been little studied to date, a large proportion is known to enter wastewater."

The study, which was recently published online in the journal Environmental Science & Technology, revealed that around 94 pounds of gold makes its way through Switzerland's sewage system each year, along with 6600 pounds of silver and high concentrations of rare metals like gadolinium and niobium. For the most part, these metals don't harm the environment, researchers say.

With gold and silver quite literally flowing through their sewers, is there any way that Switzerland could turn their wastewater into wealth? Scientists are skeptical: "The recovery of metals from wastewater or sludge is scarcely worthwhile at present, either financially or in terms of the amounts which could be extracted," the release explains.

However, in the southern canton of Ticino, which is home to several gold refineries, the "concentrations of gold in sewage sludge are sufficiently high for recovery to be potentially worthwhile," they conclude.

Switzerland is famous for its chocolate, watches, and mountains, but it's also home to major gold refineries. On average, around 70 percent of the world's gold passes through Switzerland every year—and judging from the looks of it, much of it goes down the drain. As for the sewer silver, it's a byproduct of the chemical and pharmaceutical industry, which is a cornerstone of Switzerland's economy.

[h/t Bloomberg]

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