Should you pay off debt or save money?

I wish this was a super easy article where I could just give you a clear answer about whether you should pay off debt or save money, but that’s just not how personal finance works.

Every situation is different, and today, I’d like to go over different circumstances so you can figure out the best answer for your personal situation.

Whether you have a mortgage, student loans, a car loan, credit card debt, medical loans, or something else, you may be wondering if you should only focus on paying off your debt and how saving money fits in as well.

And, you may be stuck.

A big question when paying off debt is if that should be your sole focus. Should you still be trying to save money while paying off your debt?

Or, should all of the extra money you have be going towards your debt?

You may be wondering things such as:

• Should I pay off debt or emergency fund first, as in set some money aside for emergencies?
• Should I pay off debt or save up for a downpayment?
• Should I pay off debt or save during a recession?
• Can I pay off debt AND save money at the same time?

And so on and so on. [Read more…]