Let’s be honest, not everyone can pay off debt and save at the same time. This may be especially true of those who are just starting out working professionally. There may be times when you’ll have to choose whether or not to save for the long haul or pay off debt on a credit card.
But, which is best? Let’s take a look.
If you have to absolutely choose between the two, it is probably more wise to start paying off as much debt as you can. That being said, it’s also smart to continue to think about saving and start as early as possible.
No matter if your debt is from student loans or high interest credit cards, paying them off as much as you can (as much over than the minimum payment as possible) will help you in the long run by improving your credit.
You shouldn’t focus on only paying off the debt forever, though. The best thing to do is to make a comprehensive plan that can incorporate paying off debt and saving for the future. This is best done with the help of a financial planner who can guide you through the best steps to reach your financial goals.
Sure, you may think that if you’re in a position where you need to decide whether to pay off debt or save you may not be the best candidate to work with a financial planner. However, beginning early and working with a financial planner who has your best interests in mind can be one of the best decisions you make, especially if you’re early in your career.
So, pay off that debt as quickly as you can, but don’t let saving fall too far on the back burner.
Views expressed are those of the author and not necessarily those of Raymond James & Associates and are subject to change without notice. Information contained herein was received from sources believed to be reliable, but accuracy is not guaranteed.