Weekly Money Saver: Saving Money vs. Paying Off Debt?
You’re still paying off your student loans, but you are also saving in case of an emergency. Should you focus on getting rid of your debt as quickly as possible, and then think about your savings? Or is there a better way to do it? Read on for expert advice.
Today’s Tip: In these tough economic times, you should build up a starter $2,000 emergency fund first and then tackle your debt, recommends Manisha Thakor, MBA, CFA & Sharon Kedar, MBA, CFA, authors of Get Financially Naked: How to Talk Money With Your Honey. Not only does paying off credit card debt guarantee returns on your money, but getting your debt-utilization ratio down (your total debt outstanding relative to your credit limits) can both help your credit score — which, in turn, can lower the rates you’re paying on other debt — and give you some wiggle room if you had to charge something new to your card.