Im trying to get out of debt. But I know that I gotta save money..So which is more important to do first.
2007-12-30 16:10:05 · 6 answers · asked by Imdatchick 3 in Business & Finance ➔ Personal Finance
It depends but normally it is better to pay off bills and save just a little money to have if you need it. The reason is that your debt is gaining a much higher interest than your savings. For example, you might have school loans at 8% interest and credit cards at 16% interest, but if you put your money into saving you might only get 3% interest. So, in the long run, that money will do more good paying off that high interest credit card since it has the highest interest rate. Hope this helps and good luck.
2007-12-30 16:21:15 · answer #1 · answered by KJ 2 · 1⤊ 0⤋
You need an emergency fund of at least $1000. Always pay current bills like rent and utilities first. Pay the minimum on the rest of your debt except the one with the lowest balance. Then start paying extra on that one first moving up to the one with the largest balance. You may think you should pay off highest interest debt first but physiologically it's better to see an accomplishment to keep you motivated.
If you don't have enough income to do this, get a second job,
or have a yard sale to raise money. Trade an expensive car for a cheaper one to reduce debt. Also, cut back on non-necessities and don't take on more debt.
2007-12-30 16:32:23 · answer #2 · answered by rebajg 2 · 1⤊ 0⤋
First, you clear up your debts. You received the services of whoever you owe and they should be paid. Once you have achieved this, then make it a practice to save . Each payday set aside an amount to be saved, not touched for any reason except extreme illness.Do this every time you receive your pay. At the next payday, if there is some leftover from the previous check, that goes into the savings as well. Keep vacation money separate from savings.
2007-12-30 16:20:03 · answer #3 · answered by googie 7 · 1⤊ 0⤋
Go 50/50. After paying all your bills each month, figure out how much you have left over. Take half and pay down your debt - highest interest rate first. Most of need to save more and build up a safety net, so take the other half and save.
2007-12-30 16:35:32 · answer #4 · answered by Ron da Don 3 · 1⤊ 0⤋
Bills unfortunately. I mean I know saving is more important to you but bills are more important to the world and you live in it so bills :( The more debt you get into the less you'll be able to save so get rid of the debt and then you'll be able to save better!
2007-12-30 16:52:41 · answer #5 · answered by Anonymous · 1⤊ 0⤋
pay your bills off as it could impact your credit rating
2007-12-30 16:26:05 · answer #6 · answered by speedy ski 3 · 1⤊ 0⤋