Hi Everyone,

I don’t have many clients that have large amounts of debt beside their mortgage. Nevertheless, I do come across the question whether or not one should pay off credit card debt first prior to starting a savings plan.

I believe that getting into the habit of saving is very important, and the dollar amount saved is less important, at least at the beginning, then actually doing it on a regular basis. Paying off debt certainly is important, but focusing on both savings and debt repayment will lay the basis for a more secure financial future.

We are all result based, and seeing a positive result motivates us. Therefore seeing savings accumulate and actually earning money for us is a good motivator. This then will motivate people to save more once they repaid their debt by allocating half of the debt repayment money to additional savings, and having the other half as additional spending money.

So if you have debt, go out and open a savings account, put a little bit of money in every week and pay off your highest interest credit card first.

Please feel free to comment or write me an email if you have a question.

Cheers,

Patrick