Save Money or Pay Off Debt?
Have you asked yourself this question? I know I have because I’m torn between the two. I want to do both. Then I asked myself, do I try to do both at once or just focus on one first, then the other afterwards? After much thinking, reading and researching, the answer became very clear to me on whether to save money or pay off debt.
My top two reasons for saving:
1. In the event of an emergency or unexpected expense (such as an expensive car repair), and…
2. If I lose my job, which in these trying (coronavirus) times, could be a possibility. You never know.
So, it would be great to have money set aside for either of these things. Now, with that being said, I also have two big reasons to pay off debt first. The only debt I really have left is my one credit card (and the money I owe my mom, which she has said she doesn’t want back but I still want to pay her). Anyway, here are the two reasons I want that paid off:
- The credit card has a high interest rate, and…
- To be completely debt free. I can’t wait for the feeling I’ll have when that day comes!
So again, the big question, save money or pay off debt? The one that ended up making most sense to me in the end was to pay off the debt first. The less time I want to be paying high interest fees, the better!
I think that if my interest fees were a fair amount lower, I’d be more willing to do both save and pay off debt, but to me, it doesn’t make sense to save money only to sit there paying interest fees. That’s more money I could be saving after all.
I’m currently going hard on my credit card, which actually feels pretty great. Looking at my monthly statements seeing that amount going down each time, mixed with my credit rating going up, is quite fantastic. Any unexpected or extra money I get, goes to that, and I won’t stop until that debt is gonzo!