If you’re in debt, you’re not alone. In fact, more Americans than ever are in the hole, totaling well over a couple million. Being in debt can cause a lot of stress and sometimes can break up a family. Money is what drives you and makes you survive. Every person in debt realizes at a point that enough is enough and it’s time for change. The true question is, “What Should I Do First, Save or Pay off Debts?”

Paying off your debt can look like a never-ending battle but if you sit down and budget out your money, you will realize that you’re probably spending a lot of your money on things you don’t need. Are you attending Starbucks twice a week spending $15? Are you going out to eat more than expected? All of these things add up!

The first thing you want to do when it comes to debt is attack the debt. This means pay off as much debt as possible. When your debt is paid off, this is when you can start to worry about saving. Let’s look at why you should pay off your debt.

If you’re in debt and you’re having a hard time paying off your bills, chances are you will have a higher interest rate on your credit card. Let’s say it’s 18%. Every time you don’t pay off your credit card bill in full, you will be slapped with that awful 18% finance charge on your total. If you decide to save that money, you will be lucky to get anywhere near 8%. Can you see where we are going?

If you want to save your money for the sake of saving your money, you’re going down the wrong path and it will be even harder to pay off your debt. You have to gather up all of your debt and see what will benefit you the most. Now, if your debt is all on a 0% interest rate credit card, you will not have to worry about paying it off quicker because of that 0%.

Paying off your debt can be very stressful. Our rule of thumb is to attack the biggest bills first and pay the minimum on the smaller bills. You can either do it this way or attack the bills with the higher interest rates. You just have to remember that debt is paid off with money. You can’t earn money without a job. Even if you have to get a second or third job to gather more money, it’s a lot less stressful to have a positive net worth rather than be in debt.

In the long run, it’s much better to pay off your debt rather than save up a ton of money for no reason. That money is usually better off paying off the debt because of the interest rate. If you want to save money in the long run, pay off your debts!