Should You Pay Off Debt Before Saving?

778 WordsMar 7, 20174 Pages
Should you pay off debt before saving? Well, my answer to this is, it all depends. Yes, it all depends on your own specific goals and what you want out of life. Personal finance isn’t always just a numbers game, that is why it’s called “personal” finance. There is a personal side to it that only applies to you and it varies for each individual. Each case is unique too. Some important factors are the amount of debt you have and the interest rates you are paying for them. You should ask yourself a few questions on deciding what to do. Are those debt payments tax deductible? Is my debt to income ratio within my means? Is this debt putting a stranglehold on the lifestyle I want to have? Can I afford the payments? etc.. In my opinion, I…show more content…
Realistically, $1000 is not enough for an emergency in 2017. We’re living in times where a medical bill can wipe that $1000 clean out. Now if Kris 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 tweaking them according to your priorities at the time. What If Kris needed an emergency surgery to remove his wisdom teeth and with his insurance copay, he was left with a balance of $1500. He wouldn’t be able to pay that balance because, after his initial $1000 savings goal, he’s been putting all of his leftover money towards his debt payments right? Now Kris would have to borrow more money and fall into another cycle of repaying someone else with an interest. Don’t forget to pay yourself first. You are more important than any debt you may have. My theory is that we’ve been hypnotized as a society through advertising to consume beyond our means. To pay lenders before we pay ourselves, they reel us in with the promise of instant gratification. The idea of “borrowing now pay later” puts us in a hole to begin with financially. Some dig their way out of it and some fall deeper and deeper into the sunken place of debt. I’m not saying going all
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