Which is more important?

greetings! pay your debts first to avoid all those interests. you can use microsoft excel to actually project how much your net worth if you pay your debts first or save up.

Paying off debts, no doubt. If one is in debt, the savings are kind of moot, because you're going to have that debt hanging around anyway. The faster you pay it off, the faster your savings can really grow, because none of it is earmarked towards paying off old bills. When the bebt is gone one can get better interest rates on just about everything. And that's pretty big.

Definitely, paying down your debt is more important to do first. Since your credit isn't so good and you're not paying interest on your debt I'd also advise that you DO try to have some savings for emergencies like your car or furnace dying, but I'd say put most of what you can spare towards the debt. From things I've heard I'd also say DON'T go to any "credit counseling" service unless they're non-profit and I'm not even sure I'd advise it if they are. I don't think that would help someone in your case anyway since you said it's not credit card debt and that's what they usually deal with. As others have already mentioned, creditors often do offer sizable discounts on the amount owed, especially if you're able to make them a firm promise to pay a minimum amount per month or whatever; however, I've also heard you should be careful to not make promises you're not sure you can keep. It would be better to tell them you'll pay say 1/2 of what you feel you'll actually be able to pay and then just double up when you can but you'll have the peace of mind of knowing if some emergency comes up you have a bit of a cushion. I sure wish you luck and I want to tell you, I know what you're going through. Medical bill can be a real hassle and they sure don't take long to add up if there's an illness or accident. Annie

If you even start saving a little...it won't take long for it to add up...I however also don't like bills...I would pay extra on a bill but even put just a little away so you do have a pad to fall back on and not make any more debt!

im not sure which is most important. today without much money, you better have a good credit report so either way is good. i take any left over and split between paying off more debt and saving part. even if its only 50 bucks a month for each it helps.

This is always a difficult decision to make. Personally, I believe that you have to always pay yourself first, meaning that even if you save just a little, it is better to put something toward savings rather than nothing. That amount can increase as your debt level decreases. Just my two cents

Right now, I would do as you have said and go 50 50. It is important to have that savings as an emergency fund, so that when something big happens you do not have to go into more debt to take care of it. I did this last year and was very glad I did. I just need to get back on it this year. Last year we were able to pay cash for a new water line, new breakers in the breaker box and a new hot water heater, plus the $400 water bill that happened because of the leaky water line. We have also been paying down some debt, but I feel like it is important to start getting money into my savings again.

Definitely paying off credit card debt because the credit card companies charge upwards of 25% interest, so the sooner its gone the sooner you can start saving.

The sensible thing to do is to pay of those loans. Even though it probably hurts. The faster that you pay off the loan the sooner that you can begin to build a nest egg.

Generally speaking, I'd put it towards debts before savings as the interest rates payable on debts tend to be higher than those paid on savings. However, in the unlikely event that those figures were reversed I'd save first.

Definitely begin working on repaying your old debts first. These have the power to affect your future and your credit. Even little payments off those debts will help you take steps in the right direction. Of course, building up some savings will also be very handy for emergencies, but don't ignore those unpaid debts. Put money towards repayments and keep a balance in a savings account. Keep loose change in a jar and add this amount to your savings when the jar is full. You'll get there if you create a plan and stick to it.

Honestly, I think that having a rainy day fund is more important than pay off old debts. There are a variety of reasons for this. First of all, with old debt there is a point at which they are past the statute of limitations which means that you don't have to pay them and they aren't allowed to appear on your credit report. Secondly, not having the old debt hanging over your head isn't going to help you out when some unexpected bill comes up. That said, once you've built up a savings account that would cover a few months worth of bills, then I would start concentrating on paying off the old debts.

I've had that dilemma before too. There is only so much money to go around. I know that it is important to get out of debt soonest, as it tends to nag at the back of your head, but it is also important to put savings on in case of emergencies. I've made it in such a way that all my savings get deducted even before I see my paycheck. So whatever I get, just goes to debt servicing. I know it's just a trick, but so far it is working.

I think both are important, but I think paying off debt is more important, so I would probably prioritize that. But I would still save a little as well, if I only could. The most important thing with savings, after all, is to save SOMETHING, no matter how much it is, so you get into the habit of saving.

Personally getting a Savings account going so you have $$ for a rainy day or Emergencies, and for just to do something with is a great idea, but sometimes you need to also be trying to pay on some of the other things because in time they will all find out you are working and then want some of your $$ whether you are giving it to them or not. Being responsible is what most people say is worth it, but also trying to put some aside for Emergencies is another good thing for sure. So if you can do a little of both as you can afford it, will really help with the Stress levels in your life as well.

It is survival which has the top priority while living up the life in full . Old debts, financial commitments of the past, liabilities etc only come later because caring for the basic needs of the family is prioritized than anything else.

I'd like to think both are, but having a lot of old debt costs you money in interest and fees and crud, so my reality is that I try and pay off as much as I can, and end up saving not so much.

I know how it feels to have debt. My husband and I have some debt (no fault of our own). My husband's company does not offer health insurance and he has really bad eyes. We owe money to the doctor (luckily he is great enough to arrange a payment plan instead of reporting us to the credit bureau). My husband and I have a credit card that we owe $700.00 to. Money has been so tight that it is hard to afford even the basics. I am not working right now because the economy is so bad that there are no jobs available. My husband is only working part-time which is hurting us badly. I wish there was a way for my husband and I to pay off the debt and start saving. Is there any way you can make money online as well to pay off your debt as well? I know I am looking into ways to make a little extra money in order to pay off my debts. I think saving money is a great idea in case of an emergency. I wish I had thought about an emergency fund before getting into debt.

If what you said is that your debts are interest free, then a 50-50 split between savings and debts is okay. You really need to build your emergency fund(at least 6 months worth of your salary) so if a family member gets sick or get unemployed you have money to sustain you through this period and not resort to getting into debt. Once you have established your emergency fund, you can put all your money to debt payments. But if the debts are interest-bearing, the portion allocated to debt payments should be greater than the savings. Finish-off first those debts with higher interest rates.

I know this post is a bit older but it stuck out to me as I scrolled past.... Almost any financial advisor would say to pay down current debt first (things you are not in collections or way overdue on) and then build a savings. IF debt has been deliquent and is in collections, they suggest not paying it because if you start making payments and then default again, you restart the statute of limitations. In most states it's about 7 years from the date of last deliquency. So, if you didn't or couldn't pay for 4 years (example) and then turn around and pay some and then can't keep up with it and default, that restarts the SOL from day 1 all over again!! and you lose the four years of the 7. One it hits the end of the statute of limitations they can not legally come after you for it anymore, EVER. Even if a new company buys the debt, they can NOT collect on it due to the SOL. So if you are talking about OLD debts in collections, etc VS savings, I'd definitely go for the savings. Forget the bills. Let the SOL work in your favor.