Saving 10% vs. paying off debt?

makings

Hi there,

Through various reasons, I find myself saddled with some debt :mad: I am currently saving some of my salary (5 - 10%) to build up some long term savings, but after reading Martin's "Pay Off Mortgage With Savings" post, I'm wondering if it would be more beneficial to withdraw my meagre savings, pool that with my savings per month and pay off the debt with that?

What do you think?

tesuhoha

Tell you what, while you're in debt, it will always nag away with you. We had decided that we were going to save to do our house and pay off our debt in monthly instalments. It would have taken ages (4 years) to pay off our debt in that way. Finally after saving £1000 we couldnt stand it anymore and have now lopped it off the debt. I dont think its possible to have savings and debt because that money does not feel as if its yours and you are not truly in a good financial position if you owe money. So we are going to hammer the debt with all the money we earn and I think thats the only way you can do it.

postingalwaysposting

i agree with tes, i had savings and debt, it didnt work... if anything it made the situation worse in my case. unless you are making far more interest than your debts are making negative interest you are losing out this way ie if you have £100 in your savings earning 3.8% yet your debts are £100 @ 21.9% you arnt going to be a winner. Use the savings you have now to pay some of your debt off, then the 5~10% you were going to save each month add that to your monthly repaymnets, your debt free date will drop considerably

edit ~ use this site http://www.whatsthecost.com/default.aspx to find out your debt free date if you save and if you dont, i promise you will be paying more each month on debt than your savings