Is it always better to pay off debts i.e. loans/credit cards if you come into money as opposed to saving it?
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do a little of both. pay off your debt so that you don't get deeper in debt, but also the best way to make money is invest--that's what the credit card companies do with your money.
yes definatly pay off your depts.
Your savings will never make the high interest rates your bills will.
Saving (isa) 5% Credit/store cards etc 30%
Pay of all debts - will make your standard of living easier - then the money you are paying to debts set up an ISA or buy some bonds - better to be out of debt if you have the opportunity.
if you are being charged interest on the debt then i would say yes def - there is no point saving it if you are paying more interest out! i say clear it and start with a clean slate!
I would pay off all the debts, then save the money you would have spent on repayments every month, this way you will not be paying any more interest and not have the worry of debts hanging over you.
pay off as much as you can as soon as you can
I would pay off as much debt as possible; usually, what you earn from any investment won't cover the interest and charges on the debt you have, so there's no point balancing one against the other.
I am, however, not an independent financial adviser, just a bloke who hates being in debt :)
It all depends on the interest rate. In general, the interest you would pay on money borrowed on credit cards is higher than the interest you would get on the same amount that was saved. Therefore, you would be better off financially if you paid off the debts.
An alternative is to transfer your debts onto an interest free credit card.
Good luck.
yes unless u dont wanna be bankrupt
The ONLY reason to be in debt is that the money you have borrowed is EARNING MORE than you are PAYING in interest.
About the one and only example of this is Mortgage (your house is increasing in value faster than the Mortgage interest rate)
If you can Invest your money in something that returns a higher rate that the interest on your borrowings then do so (pay off the interest with the earnings and re-invest whatever is left).
Otherwise pay off the debt.
NOTE - only those who choose to be poor get into debt -
Those who choose to be rich save & spend, those who choose to be poor borrow and spend ...
pay off your debts, you will be paying more in interest on the money you owe than you would earn on money you save, if you are paying £5 a month on your debts but recieveing £3 on savings, it's a bit of a no-brainer really!
You may want to do half and half, if that makes sense for you. I would look at the interest rates and such, if they are very high, it may be best just to pay them off right away. Otherwise, you could split the money, half to pay off some of the debt and half to invest.
Pay your debt first! The longer you wait by only paying a little adds up in interest payments over time. Pay off your debt first and then invest. Once you have a clean slate you can roll over more money to investments like mutual funds, cds, or stock.
definatley pay of your debt as soon as you can as youll just get charged interest.Or switch your debt to interest free cards but these tend to only last for a bit.good luck
Use all of the cash to pay off as much of your debt as possible. Work out which debts are costing you most and make sure you pay those off first. You will never get a better interest rate on savings than you will be charged for debt so don't bother with thinking that way. When your debts are much reduced it makes getting to completely debt free much easier. Only then should you consider building up your savings.
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