If you are young and you have student loans at a low interest rate, then put some of the money into savings so that you will be able to get/repair things (a car or other items you will need for your job).
If you have some existing debt that is at a high interest rate- like credit card bills with 30% APR rate, then it is worth your while to pay those off now, to get rid of them completely, and then put the money you were paying into them into savings later.
During my 1st time home buyers' class, this was one of the things they went over with us- and it is extremely helpful to look at your debts and interest rates, and see the need also for potential savings.
Hope that helps!
Also pay off debts first. The interest rate you are paying on your debt is always far higher than you would get putting the money into a savings account.
So clear debts and then start to save
Always pay off your debts first, because the interest rate you pay on the debt is higher than the interest rate you earn on your savings. Of course, if you have a employee-match 401K, a tax-deductible low-interest mortgage, or some other savings plan that pays a very high rate, you may want to think differently. But almost always, pay down your debt - credit cards, car loans, student, loans - first.
Pay off debts. Debts usually come with interest which mounts over time. It's best to get rid of debt as soon and quickly as possible. Theres no point in saving the money if you're going to end up spending it to clear your debts anyway.
It depends. You should have an emergency fund , enough to get you through 3 months (more if you have a family) of unemployment or sickness, etc. Beyond that, if you are paying interest on those debts, you should pay them off as quickly as you can because they inhibit your ability to save and invest for the future.
Of course, the highest interest loans should be first on your hit list.
Always have an emergency savings account first - always. What good will it do you to start paying down debts & then you have your car break down? Set aside $1,000 first & THEN hit your debts hard.
If you pay off debt, that frees up money you can save. It also improves your credit score, which will help if you are planning on saving for a downpayment on something (like a car or house).
