It is a very personal decision whether you should work to pay off your debt or grow your savings. One the one hand, there are many advantages to growing your savings. The first is that you can actually afford to do more things with your money once it is in savings. On the other hand, if you continue to accumulate more debt, you will always be stressed and constantly wondering how you are going to make it to the end of the month.
On average, it takes someone thirty years to save what it would take twenty to forty years to pay off their debt. It only takes four years to get a two-year mortgage paid off. This means that you could have money in each of those years to live on.
If you have a lot of unsecured debt, this might not seem like a big deal. However, if you are like most people, you have a credit card or two that you use often. These cards carry zero interest and you will have them for a long time. That means that you are racking up enormous debt, which will take a very long time to pay off.
Paying off your debt is the smart thing to do. Instead of using the interest from your credit cards to finance your unsecured debts, why not use the interest from your debts to finance the consolidation process? For most people, this is an easy option. In fact, it is a common option that is offered by most debt consolidation companies. They will work with you to lower the interest rate on your debt so that you can save money each month.
Some people do wonder, however, if it is better to pay off their debt and grow their savings or if it is better to pay off my debt and go into debt Consolidation. The answer varies depending on the individual. Another consideration is the type of debt that you have. Many people have student debt and while consolidating it can lower monthly payment amounts, it can also increase the interest rate that you have to pay. For these individuals, the answer might be to pay off my debt and consolidate it.
One other question that someone may ask themselves is, “Will consolidation work for me if I am already behind on my bills?” It is important to remember that if you are behind in your bill payments, you might not qualify for debt consolidation. However, there are companies that will work with you regardless of your credit history. You simply have to shop around.
One thing that you should think about when you are wondering is, “Is it better to pay my debt or to grow my savings?” You can’t go into debt Consolidation with a negative budget. The goal of debt consolidation is to get your debt paid off and to continue to grow your savings. If you do not have a healthy surplus to pay down debt then it is likely that you will fall further into debt and find yourself in the same situation as you were in before.
Now back to the original question, “Is it better to pay my debt and grow my savings or to pay my debt and consolidate my credit card balances?” There really is no right or wrong answer here. It all depends on your situation. You should always take a close look at your situation and decide what is best for you. There is not one right answer that works for everybody. Paying off your credit card debt and saving money is always a good idea but you should consider what you are doing first and foremost.
