Should you save when you have debts to repay?

2 December 2012

If you have large debts with various credit providers saving is not a good option.
You will most likely be paying high interest rates on each of your debts. It makes financial sense to consolidate your debts as paying them off quicker provides a better return.

Saving could provide a more positive feeling than the negative feeling of paying off debt. Saving also allows you a safety net so if you run into difficulty you are not forced to take on more debt. A good strategy would be to consolidate your debt and whatever you are saving put half into paying off your debt faster and half into a savings account, even if it is a small amount.

Also include a small contingency or saving into your living expenses in your budget to set aside for the unexpected expenses like breaking down of vehicle, medical expenses and other emergencies.

This can be looked at as a savings plan providing a safety net for emergencies.

For further advice on debt consolidation please contact DebtBusters on 0869 99 06 06 or have a look at our website

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