to save or pay off debt?

Question

so i'm a student at university. my parents foot the bill for everything. still, i have about 2500 of credit card debt.

i do have income on a somewhat regular basis from part time jobs. question is, should i devote all income i get to the debt or save some as well?

Answer 1

This is a great question and actually many people share your concern.

You should do both, and the best way I found is this. Open a savings account you are not going to touch, and every time you get paid, deposit 10% of your paycheck into this account. Then, out of what is left, use as much as possible to pay off your debts. Please take this seriously; remember that being in debt is financial slavery.

The key to saving here is to treat your savings just like any other debt: deposit money every single time you get paid, no matter what happens. This is the old "pay yourself first", and I add, "every time you get paid, no matter what".. You will be amazed after a few months of how much money you will have saved. How would you feel? How important would that be for you?

And lastly, until your debt is paid off, make sure you avoid any and all trivial expenses. Use every penney you can to eliminate your debt, and pay yourself 10% before you pay anybody else.

Good luck!

Answer 2

Definetly both! Create an ingdirect.com.au account and use this to save even $50 a week - you will be amazed how quickly it adds up and as ING does not have any atms - you wont be tempted to withdraw. With most banks you can also use the internet process to set up a transfer where money is routed from your savings weekly, monthly or whatever to the credit card debt - these are the best options!

Answer 3

Get out of debt first, Then when that is done start saving the money that would have gone to your debt. Credit card interest rates are high, and by not paying them off you lose money.

Answer 4

Get out of debt. You are probably paying a high interest credit card. Get rid of that and then invest the money.