Should You Pay Off Debt Before Saving?

In 2017, $1000 is not enough for an emergency. We’re living in times where a medical bill can wipe that $1000 clean out. Now if Cris had a few years in the workforce under his belt and built a reasonable amount of savings let’s say 3 months worth of expenses, I’d recommend saving at least $150 a month still and putting $250 extra on his car payments. I don’t believe in just focusing on one thing 100% of the time. I’m big on diversifying your goals and also adapting them according to your priorities at the time. If Cris would’ve paid all of his $400 excess cash flow per month on his car and found out he needed $1500 for an emergency surgery he wouldn’t be able to get that money back from his car lender.

If I was in this situation, I am honestly be a goner, I’ve listened to stories who have gone through a lot of debt and escape barely to continue with their lives. I would be infuriated and stressed constantly to keep a roof over my head.

If you have high interest debt, you may want to look into paying it off even before the first option of saving the $10,000. Paying off this debt can only help you going forward because you won 't be paying the high interest attached to your debt. You are wasting a great deal

But many people still end up spending all their income and leaving themselves with no savings. With regards to this, Mr.Chilton has a very simple solution, “Save first. Spend the rest.”(Chilton 76). I agree with his lesson to save first as saving first and then spending will make sure you won’t end up spending everything. A similar hypothetical situation would be that you have an assignment due tomorrow but you want to play some video games. In this scenario, it would be wise to finish the assignment first because it is the most important and then play video games with your remaining time. Saving is the same; it is the most important to you need to save first. It doesn’t matter how you save, just save. You can use “Payroll deduction, automatic withdrawal, pre-authorized chequing”(Chilton 77), just save first. As well, you have to save right now and “not in a few months when you’re hoping to finally have time to craft a financial plan(Chilton 77)”. When I get a part-time job in the summer, I will start an automatic savings plan with Tangerine in which Tangerine will deduct money to put into my savings every time I get my pay cheque. This way, I’ll definitely save some of my money before I

Is getting a college education worth going into debt? That is a good question and one that I say yes to. There are many reasons to go to college, such as getting that high quality education to go further in the job you currently have, or to get an new job all together. Another reason could be to become a good role model for your kids, or just so you can proudly say you were the first in your family to go and graduate to college. Another reason could be that you simply go because everyone else in your family has been. Whatever the reason, there are definitely benefits to going into debt in order to go to college, because it has almost become necessary to have a college degree to have a good job.

In regard to saving money, I have found that one of the simplest deals by taking back control over the credit card companies. Faster than expected, credit card debt accumulates quickly. Each purchase on a credit card is not limited to the price on the sales tag, when the entire purchase price is unpaid on the subsequent bill. Be realistic with your purchases. When living on a cash budget, discuss how much “ money is ‘available’ ” for spending as well as how often that amount is withdrawn (Do You Know Where Your Money Is). Avoid signing up for another credit cards when contemplating how to handle expenses. While it may appear that paying off one credit card with another would make it more manageable, it is only compounding the problem. In order to determine spending allowance to pay off debt, I recommend to construct an excel document of the expenses for each month.

One cold morning Sam Black woke up with aching chest pain. Troubled by this new condition he went to see his Heart Doctor. Little did Sam know that hours later he would be lying on the operating table in route for a triple bypass surgery. The surgery went as planned, but it was not the last of them. Sam was sent to many specialists and rehabilitation centers, building a large bill, which they had no money to pay them with. He still pays several grand a year for the medication he is prescribed. Years after the operation Sam and his wife, Elsie, have narrowly escaped foreclose, however the most problematic debt they have is the hundreds of small term loans with interest rates in the triple digits. Elsie once said in an interview regarding

Pay off your student loan faster and you will be able to start saving to buy a house, you will be able to start your wealth building efforts, and you will be able to start a family earlier. Your student loans are like a mortgage without the house, especially when you consider that many people’s student loans would easily cover the purchase of an apartment or house. Pay off your student loan faster, and you will be able to get on with your life a little sooner.

Ways to borrow some money to pay off debt include borrowing against life insurance policies and taking out home equity loans, according to The Motley Fool. Some life insurance policies have cash values allowing policyholders to borrow against that value. Home equity loans allow homeowners to borrow against the equity in their homes to consolidate debt or make home improvements.

Do you know the average debt for students that graduate from college? The average debt level for all graduating seniors with student loans is around 29,400 dollars and has not stopped increasing ever since. Unfortunately, many people try to avoid college due to a lack of academic preparation or the lack of financial resources. Even though avoiding college may seem right economically speaking, it will limit your options when it comes to deciding on a career. As to why their are several solutions to limit debt such as scholarships, working to save, or attending a community college; however, one solution is superior to the others.

Have you ever felt that maybe college wasn’t for you? I have had that thought several times but I also knew the importance of having a degree. Don’t get me wrong college is expensive and can be overwhelming but it’s very beneficial. I agree with Jim Lehrer’s recommendation, but it still does not apply to everybody and shouldn’t be mandatory.

One of the most difficult parts of college is paying it off. It is crucial to have the least amount of college debt as possible so one is able to live their life without worry of having to pay it off for years and years. Living in a house hold with a single mother can be difficult when it comes to expenses. With less money a key part of being able to pay off college is by saving money.

Paying off debt is always smart, and in many locations, owning your own home is less expensive than renting in the long run. On the other hand, putting the money aside to pay for an expensive car or a boat is not saving; that’s just delayed consumption.

The Gordon’s are hurting their credit score. They are hurting their credit score because their net cash flow falls $1,825 under their total income. They are spending more than they are earning. If the Gordon’s used their credit cards, this would add onto their “other payments” tab and that would further increase their total outflow. They would eventually not have enough money to pay off their credit cards. They also have an APR rate of 28%, so they would have to pay the interest rate on top of the payments they don’t pay in full. They also have not utilize their credit, which can lead credit accounts to die.

Most of the time Americans spend more money than they earn, which leads them into debt. However, every so often you end up with extra money in your pockets from a sudden windfall like a birthday, or if you’re lucky a tax refund. Wondering what the best use for that money is? A quick trip to Vegas sounds like fun but most of us know there are better ways to spend it. So what should you do with the extra cash? The first thing to do is pay off your debt or any money you borrowed from someone else. If you have more than one type of debt, you should pay down the one with the highest interest rate first which is usually your credit card and after that you should try to save a good chunk of change for emergencies. It’s smart to imagine what