Should one invest, pay of credit card debt, and save all at the same time?

Question

Or should you just focus one one....?

Answer 1

start with a small emergency savings, then pay off the debt. After that you can invest.

Think of it this way... would you take a cash advance on your credit card to make an investment in something? Probably not. So pay off the credit card and you save yourself the interest as well as free up more money to invest with.

Answer 2

it depends on what rates your credit cards are. Typically, if the rate on your credit card is more than you can earn in a savings account (approximately 5%), it's best to pay it off. However, if you have access to a 401k plan and your employer matches, you should participate in the plan to get the full match since it's free money.

To pay off your debt, you should make a list of your creditors along with the interest rate and minimum payment amount. List them in order of highest rate to lowest. Pay the minimum payment on all of the debts except for the highest rate one. All of your extra money should go toward that one. Once it's paid off, take the entire amount and add it to the next highest amount and so on, until you're all paid off. This will let you pay the least amount of interest.

Once you're out of debt, you should establish an emergency fund of 3-6 months of expenses. You should put that into a high yield savings account.

Once you have an emergency fund and are out of debt, you should start investing. Do this by maxing out your Roth and 401k each year. Your investments should be in no-load, low fee funds like those at Vanguard or Fidelity.

There are several books listed on the resource page below you should check some of them out.

Good luck!

Answer 3

It's all good. But my opinion is you should always invest 10% of your money. Live on the other 90%. If you get an extra job and devote the income (90% of it) to paying off debt you can probably knock it out pretty quickly. I say a cash cushion doesn't have to be that much. Maybe 3 grand. If you invest more you'll have more money in the long run and it'll be harder to get to which will help you differentiate between an emergency and a want. But like I said, whatever you chose is a good choice.

Answer 4

pay off credit card debt first, save up an emergency fund of 3 to six months expenses next, then invest

Answer 5

focus on paying off credit card debt. If you don't have any money saved put a portion in savings for emergencies but unless you can earn more than what your credit card charges in interest you'll be losing m oney.

Answer 6

If at all possible... even saving $5 a week...
The 1st and most important thing to do is get rid of the credit card debt

Answer 7

pay credit debt first untill you know you can pay it back, then invest. your suppose to always save, but if you save your whole life and thats it, it wont work. investing in cd's college funds, life insurance, stock or houses is better. but stocks, bonds,401(k) and stock markets, you dont have control on your investing. but you can control your savings, and houses.

and theres good debt and bad debt. personal loans, and car loans are bad debt, school loans and house loans are good debt.

Answer 8

Pay off the CC, no doubt. After that if you are not happy with your current pay, think about how you can earn more. Don't just think of how to save, think of how to make more money at the same time.

Answer 9

you only live once so do all three and even add one more have the odd flutter on the horseraces go on you will be happier for it maybe even a lttle wealthier!!!!