You'll be better off if you pay your debt first. The interest rates can't go much lower from here, and they might soon start rising.

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Never spend your money before you have it. -- Thomas Jefferson

Pay your debts.

Save then.

Otherwise, you are borrowing to invest at the rate of interest that you have on your debts.

Borrowing to invest? Always bad.

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The Student Financial Times

Author's List of Published Works

You should pay the debts with the higher interest rates, than the lower ones can be paid. Because this will make you save some amount of money that will be saved by the interest that would not be now paid on high interest debts. By this you will save and pay the debts..............hope this will help.

Pay off your debts! Having debt can ruin your credit and having debt while saving doesn't make sense because most loans have an interest rate. Generally this interest rate is higher than the inflation rate in the economy. When you are saving you want to find a rate that can beat the inflation rate. When you begin saving with debt you are not only trying to beat inflation, but also your interest rate on your debt.

In short, I would focus on paying off your debt first. Then focus on saving.

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Payday Information

This is an excellent question and there has already been a lot of good feedback. Having worked with consumers from all walks of life for many years, I firmly believe in a little of both. I would be curious as to what types of debt you have and their corresponding interest rates. But in general, I suggest paying down debt, focusing extra money on the highest interest account(s) because that is bleeding you of money, along with saving. You cannot neglect saving. It is a bit of a balancing act as mentioned in a previous reply. Having something saved (a minimum of $500 in an emergency fund, although 3 - 6 months is recommended) is crucial because if you have an emergency and do not have money available, you will resort to using some sort of credit and thus building more debt.

I hope this helps. I would like to hear how you are doing, and if you have any follow-up questions.

Kathy Jo

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Kathy Jo Pollack
Certified Life Coach, Trainer, & Speaker
Focusing on Financial Independence
www.kathyjopollack.com

I would most def. pay off your debts first. You will lose money in the long run with the interest rates and other charges from the debt. I would get them settled before saving.

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New graduate with an emphasis in debt counseling.

for 3-6 months worth of savings, what would you consider all to be categorized in the "living expenses"?

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Debt Aim | Debt Help and Information

Pay your debts off and you'll have way more money to save later