Which is more important....paying off debt or having enough in your savings account for emergencies?
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ANSWERS: 17
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Id say debt because with good credit you can borrow in emergencies.
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My personal priority is paying off debt. I have the bank, my parents or family if I ever need emergency money.
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What kind of debt? If it's credit cards you will be better off paying them off and saving the interest you are charged. In case of an emergency you can always fall back on your credit cards. You always need to have some kind of "emergency fund" even it is does mean using your credit cards. If you can pay off credit cards you will have a LOT more money on interest. However not knowing the debt it would be hard to say what to do.
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If the Debt isn't costing you anything IE:interest,or threatens your credit score then pay the the minimum they ask you for and keep your money in your savings account were it earns you interest.+3
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For me, it's paying off debt. I would be much more worried about drowning in debt right now than not having money for emergencies. With the economy and my paycheck what they are, it would be too easy to rack up debt I wouldn't be able to pay off if I don't act on it fast.
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Everyone who has replied has great answers! The question of what kind of debt came up... In my case it is morgage payments. I have a chance to pay off a second loan, but it would pretty much wipe out everything I have in my savings. It would save me a nice bill every month and the interest is pretty high on it. It makes sense to pay it off, but I am nervous to have nothing in my savings to fall back on. Another thing I have to keep in mind is I am not having a lot of money coming in to save these days. Soooo, I would not be able to save the money again for a long time. Otherwise, I made this question somewhat vague on purpose to get your opinion on debt and savings.... but if you want to reply to my situation, great! Thanks for your advice.
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Their both important. But savings only in that they prevent future debt. So unless you have a biggy coming up which you could have difficulty financing and an established lo-interest loan, it has to be paying off debt.
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both are important!!! debt can ruin your credit that you might need to fall back on during a rainy day. debt with high interest (25% a week or you get your legs broken) is always great incentive to pay it off, early if possible. on the other hand, debt to your millionaire father of $1,000 is less urgent. i always suggest that folks keep at least several months of savings for emergencies. now that some banks are closing, i'd probably keep a few dollars at home - enough to get by on with a first aid kit if a nuclear power plant melted down (i lived thru Three Mile Island so i harbor that concern). :)
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Pay off the debt. If you have an emergency you have credit.
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Paying my debts takes priority
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, always keep money for emergencies because anything can happen...budget for both ..
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Pay off the next highest credit balance if you can. Then, take that payment and put it into a savings account each month (not the "emergency" account). Since you had already budgeted that amount of money per month anyway, you won't miss it. Keep saving that money and when the balance of your mortgage payment is reduced enough to equal what you have in that savings account, then use that money to pay it off. Thus, you don't have to increase any payments one way or the other and you can gradually add to your "emergency" account as you're able to.
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Both. If you have to choose one or the other, save up a minimum $5000 emergency fund....then start paying off debt. Without that emergency fund, the first emergency that comes along will almost certainly increase the debt exponentially. I shouldn't have to say this, but I really think I do...if you manage to pay off debt, don't be stooopid enough to make new debt...ever! The first time you step into a steel trap, it's called an accident. The second time it's called reckless disregard.
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pay off the highest interest first
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you always need to keep money for emergencies , but at the same time keep trying to pay off debt and cut credit cards up and make a budget and stick to it.........OOPS!!!!!! i had already commented here..... its now 19th march 2022
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The point of emergency savings is so that you don't get yourself into debt in an emergency. So: if you're in debt, you need to pay off that debt first. HOWEVER: be aware that you SHOULD have at least 6 month's living expenses set aside in case of JOB LOSS. Most experts recommend 12 months.
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Pay off debt. Your savings will never make the interest your debt is charging. I personally don't have debt, and if my savings go over 2000 ss thinks I don't need their money.
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