June 30, 2022

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Saving Money vs. Paying Off Debt: Which One Should Come First? – Mental Floss

The average millennial carries more college debt than any previous .......

The average millennial carries more college debt than any previous generation, but debt and other financial problems are not limited to millennials alone. According to a recent survey, 40 percent of Americans don’t have the means to pay an unexpected $400 bill.

If you’ve tried the typical belt-tightening advice, like skipping Starbucks or going out to eat less, then read on to find out how to balance your debt with your savings and start living a more comfortable life.

Getting Out From Under Debt

Many people are forced to begin their financial journeys already saddled with a large amount of debt from student loans: About 54 percent of students need to borrow in order to cover educational costs. But with some careful financial planning, you can pay off your debt and increase your savings.

There are several financial approaches that people use, including debt consolidation, freelancing to make extra income on the side, and even investing. Choosing the right approach depends on your income, goals, and the amount you would like to save or pay off.

When to Prioritize Savings

One of the main reasons that people should prioritize increasing their savings is when they don’t have an adequate emergency fund to float them when disaster strikes. Some emergencies that could lead to even more debt include car repairs, emergency medical treatment, or unexpected job loss. Experts recommend having funds to pay at least three to six months’ worth …….

Source: https://www.mentalfloss.com/article/649596/saving-money-vs-paying-off-debt