Savings While Paying Down Debt?

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  • #2133

    How can I increase my savings while paying down our credit card debt? I realize I need to do both but I almost feel that it is more important to get rid of the debt.


    Auto draft or auto savings may be a good option for you. If you’re taking 10% or 20% off of the top of your paychecks, you’ll very likely not even notice it. This would allow you to build savings while you’re still paying down your debt the way that you currently are.


    The instinct to get rid of the debt is a great one! The only saving you really need to do while paying them down is to build your emergency fund, which is six months of expenses in a readily accessible account. Building that, and replenishing it when you use it, will give you the cushion to ensure you don’t have to borrow heavily on credit cards in the future. We recommend that you split your savings 50/50 between credit card payments and building your emergency fund. When it reaches six months of expenses, feel free to put 100% to those credit cards until they are paid off.

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