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Great Reader Comments About Saving Versus Paying Off Debt

By Erik Folgate

Craig and Blaine, Money Crasher readers wrote in response to my post about Paying Off Debt and Saving For the Future At The Same Time.

Blaine Wrote:

We are on one income while my wife is in law school, and still manage to build up our emergency fund and make extra payments against our mortgage and save for retirement.

We aren’t very good about the whole budgeting bit; we just try not to spend more than we have to and keep ourselves too busy to buy random junk.

Craig Wrote:

We’re a dual income family that subscribes to the second school of thought. We prioritize retirement and both max out ($15,500) every year. Then we prioritize college savings for our toddlers ($1,200/month), then the rainy day fund ($250) month, then whatever little is left after life’s necessities (i.e. mortgage, groceries, bills), we try to have some fun with it. We don’t carry credit card debt, with the exception of a loan we converted from home equity to get a 1.9% rate. We always pay the minimum and usually try to chip away at it with an extra $100/month even though we could earn more by investing that cash. That’s purely for psychological reasons – we don’t really want to carry the credit card debt for 7 years, even though it’s only at a 1.9% rate.

I am warming up to the idea that there are multiple ways to approach the debate over saving first or paying off debt first. My post was about the possibility of being able to do both if your financial situation is favorable to doing it. I think you are on the right track as long as you are consciously making an effort to make goals for saving AND paying off debt. You can’t save like crazy, but rack up crazy amounts of debt, and likewise, you can’t pay off all of your debt, and then never save a dime.

Erik Folgate
Erik and his wife, Lindzee, live in Orlando, Florida with a baby boy on the way. Erik works as an account manager for a marketing company, and considers counseling friends, family and the readers of Money Crashers his personal ministry to others. Erik became passionate about personal finance and helping others make wise financial decisions after racking up over $20k in credit card and student loan debt within the first two years of college.

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