Savings or Debt Pay-Down?

I get asked all of the time “Should I build my savings, or get rid of debt first?”

My answer is always the same – “Do both”

If you’re swimming in debt and also have no savings, consider yourself at your rock bottom, financially.

There’s only one way to go from here! (It’s up!)

Start laying out your game plan. Essentially you need to do three things:

1. Find out how much your expenses are.

2. Find out your income

3. Subtract number 1 from number 2

Simple enough, right? Now you have your no-s*** number, as I like to call it – and you can plan.

Don’t be discouraged if this number isn’t much, every little bit counts.

If this number is not in the positives you have another issue and you need to create more income or you need to get rid of some expenses (daily coffee trips add up!)

That scenario is for a different post that you can find here – if you’ve got some extra to spend monthly, keep reading

Depending on how much interest you’re being charged you will be able to see which debt needs the most attention first and can tackle it.

I recommend to simultaneously pay high interest debts and create savings – a 50/50 split.

This will ensure that you are chipping away at those debts costing you more money and also setting yourself up for your emergency fund.

Once you have your plan of attack, you’re able to sit back and follow the course.

Money doesn’t have to be stressful – write it out, create your plan, and attack.

Feel free to reach out to me if you would like some guidance. I love deep-diving into finances and also love to hear others opinions.

– Boss Mom On A Budget