Should I Pay Off Debt or Save?

In this brief post, we explore whether it’s better to pay off debt or to save money.

The short answer is, it depends on the cost of the money.

Look at the interest rates you are paying on debt, how much debt you have, and on what. Compare this to what you might earn on savings based on what amounts you would be saving.

Pay Off Debt or Save? Another Consideration

You also want to consider your personal situation such as credit profile and debt to income ratio.

If you are looking to make a major purchase like a home or car, having a high level of debt may cost you, by either making your interest rate higher, or causing you to be denied. In that case, getting your debt to income ratio down and then saving money for a good deposit may be a good option.

Get the free Live Debt Free workbook which includes the Debt Down Bingo sheet.