Is it Better to Pay Off Debt or Save Money?
Choosing in deciding whether to save money or pay off debt is not an easy choice. You can manage your money efficiently by paying off debt before anything else. The best way to get out of this situation is to strike a balance between the two.
Get started by understanding your budget needs:
1. Calculate your expendable income: This is the income left after paying for rent, groceries, and so on.
2. Check your regular expenses: Any fixed and periodic expenses should be recorded. Look for ways to reduce your monthly bills
3. Set a financial goal: Plan a budget that allocates a fixed amount of money for investments every month in the form of Mutual Fund SIPs (Systematic Investment Plans).
Here are some valid reasons to prioritize debt repayments:
There is nothing more miserable than finding yourself short of money every month due to high-interest debt. It can feel like you're stuck in debt forever, maybe not but certainly for a very long time. By reducing your principal and interest owed, you'll have more money in your budget each month for savings or other emergency expenses. Savings goals based on age can also help you save for your retirement.
Paying off debt quickly will liberate your mind and provide you with financial security sooner rather than later. Paying down debt each month while building your savings ensures you have sufficient funds for making investments. Inflation may eat away all your current purchasing power if you fail to make investments. Furthermore, having money in the bank provides a sense of freedom. You can also improve your credit score by paying off your debt first. Consolidating your debts may be a good option if you have multiple high-interest debts. You may be able to qualify for a lower interest rate when you combine them into one loan.
Women shouldn't shy away from discussing finance. This is the only way to break the walls and set a level playing field. Let's be unstoppable. We've all heard the saying, "Be the change you wish to see in the world." This is for all the ladies out there, come join FIKAA to empower women so they can learn, invest, connect, and grow together.
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