09:02 21 December 2013
If you are wondering if you should pay debts or set aside money for savings, the simple answer is that either will help your cause on paper. In reality, most people would benefit more by paying of debt. Everyone needs to have a savings for emergencies and to prevent future debt, but the main focus should usually be reducing debt.
Here are a few reasons why focusing on debt elimination is beneficial:
Keep in mind that paying off some debts could incur a penalty fee, so before you decide to pay off bills early contact the lender to ensure that you will not be responsible for a hefty fee. If you have a low fixed interest rate, you might be able to use your funds more wisely by investing if you earn more in interest. If you are not quite sure if a change will be better for you, you can always speak with a financial professional for helpful advice.
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