Should You Pay off Debt OR Save for Goals First?

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In this video, we’ll cover four easy steps you can take to get a clear picture of debt – vs – saving. Make sure you watch to the end, because we’ll also give you some important precautions you can take, which will make the whole process run more smoothly.

It can be very frustrating when you are digging in your heels and pushing HARD to pay off debt – only to be left feeling like other needs you SHOULD be saving for are going by the wayside. Yet, if you set money aside for those needs, it seems like you are just prolonging the pain of carrying that debt around.

Whether you are on the journey to becoming debt-free or you are paying off debt, you'll find tips in this video which apply to your situation.

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We're Hope and Larry and we love practical frugality. We raised our four sons, debt-free, including paying cash for our home when our income was well under the national average. For tips on saving money, budgeting, paying off debt, and setting goals (while living with a spirit of joy and abundance), subscribe to us here on YouTube and visit us at our website and on social media.

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I paid off all my debt in one year then put that money into savings. Been 16 years debt free.

alliestrachan
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I appreciate that you two aren’t condescending at all in your advice. I just came from a Ramsay video of the same topic, and it was pretty rough.

jaycee
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It's what is frustrating me. Trying to rebuild my emergency fund and paying off credit cards.

MariaGarcia-gjie
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I advocate an emergency fund first to cover the dead/ dying appliance scenario, while paying minimum on all other debt except one. I’d pay an extra amount on one debt for psychological satisfaction. Once the emergency fund was met, I’d split that payment I was putting toward the emergency fund between debt payoff and a savings goal. My sinking funds were part of my monthly fixed bills. It was really tough at first but being consistent every month is key. Each debt was on a separate piece of paper; I tracked the payments. When I paid off that debt I’d have a debt burning party by setting the piece of paper on fire (safely, of course). I played other games, like every two months I’d add $5 more to my monthly debt payment. Or pay the finance charge along with the payment on the credit card I was paying off, so at least I wasn’t paying interest on the interest. Also, be kind to yourself when working your way out of debt. It’s not easy but it is possible.

katworkstowander
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I freaking love these guys it's like a show on local TV or something it's just so wonderful and wholesome ❤️ ♥️

lukeb
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As soon as we retired we took our pensions and IRA money to pay off the house, student loans and cars. Now we are debt free and still have enough to save 7k a year. However we had to become very, very frugal. I am glad we did all of our traveling when we were younger.

donnawoods
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Whatever you think about attracts more of the same and so that would mean focusing on how well you're doing is very important

KC-drcg
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Very helpful for those of us - like me - who are trying to do two things at once! I especially like the percentages approach.

FidoHouse
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Hope and Larry, thank you so much for your great advice. This video really helped me a great deal!!

mariesharp
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When I decided to pay off my first mortgage, I used this little trick to keep me going. I got an amortization schedule (pre-internet so I couldn’t print one out ☹️) and every month I tried to add the principal amount that was due the next month, so moving ahead 2 months in the schedule. It is very sobering to see how little you are paying on the principal in the early years, but that does make it easy to meet the next month. It was very satisfying to color in two squares every month and see how rapidly I was moving ahead.

ohmcintyre
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Love this! Thank you so much for this video!

enyonamedoh
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Iam so much more enjoying these budgeting, paying off debt and living beneath your needs videos lately. They are so helpful and understandable.

sherribrink
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I just found your channel. Thank you so much for this video. I've been so confused as to which one to do first, and you made everything so clear and is a plan that I can implement. Most financial people give either or advice which makes things even more stressful. You've got a new subscriber here.

Orangetiger
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Thanks for the video - this is actually something that has been on my mind - I wanna pay off debts and get some Home updates so I appreciate your video- thanks 😊

NC-dvyf
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Thank-you for this video
When I was paying off my car I threw everything at the car loan and saved nothing, it got paid off quickly but it meant everything else was neglected, once the car was paid off I started to put everything into savings, not spending $ on anything above absolute necessities, after doing thus for a year I burnt out, for a year we saved NOTHING and PAID NO DEBT, well this year I decided it's time to pay off the student loan, as I really want to pay it off before the interest kicks in in August, I'm splitting the money equally between savings and the student loan, and I'm still trying to fit in some fun here and there as low cost as possible to not burn out

kaitlynyoung
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I dived into 3 home repair projects this past fall at the same time which emptied out most of my project funds and checking. When I realized I was going WAY over budget, I immediately cut out all discretionary spending and vowed to continue no buy practices for January through March to pay off my overages and build up my financial cushion. I figured these three months are a great time to address this issue because I'm home and not planning any travel or projects during this time..

janetstonerook
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Hope and Larry, thanks for all of your videos. I've been budgeting for several years now, but your videos have taught me so much more about money management. I actually look forward to living more frugal so that I can stay within my budget, planning for ways to lowering costs and let's face it, even paying off debt when I've overextended myself. (Which I work hard at NOT doing - but things come up). I share your tips and videos with family and friends and look forward to each one you upload. Thanks again for your hard work to inform your viewers.

cherlaneharris
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Thanks for the video. On my to get this setup - please keep up the great work you both are doing.

johnkatkus
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Keeping it real Hope &Larry. Thanks ❤

mae
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This is great for me, I was working how to pay and save. Thank you so much!

Thefarm