I keep going back and forth between the idea of first saving a cushion then tackling paying down my debts and the idea of first paying down debt and then saving a cushion. I can’t quite figure out which is the better option. I want to figure out what the most efficient way to do it but everybody doesn’t agree on what’s best way to go.

I suspect it depends on what kind of debts you have. Credit cards, student loans and back taxes probably all require a different strategy. But I want to know what’s best in my situation.
Part of my problem is I have a house now and a family. I can’t just say “Screw you mister credit card company man!! I’m not going to pay you anymore .” As satisfying as that would be it really isn’t an option when you have a family and/or property. Once you have a family you have to be more careful. It’s a shame too because there are days that t I can hear the lyrics to the classic country ballad Take this job and Shove it ringing in my ears . Can’t really live the lyrics if you have a lot of debts and a family to support. Oh, Well.

So where does my money go first? Debt? Savings? Or Both? I’m still up in the air about it. I have some savings but I wish I had more. For now I’m working on paying debts down. Still I don’t actually feel comfortable recommending one over the other. What can do is tell you what I think you should consider while planning your debt relief plan.

Is your income stable? Is it growing? Is there enough coming in to cover expenses?

Could you survive on unemployment?

How much debt do you have?

What interest rates am I paying?

What interest rates am I receiving on savings?

How risk adverse am I?

Could I survive 3-8 months of Unemployment?

How much do I need to survive?

You can probably think of more. But for me the bottom line is to clear the debt as a fast as I can . Of course I hedged my bets by building a safety net for my family by saving some money for emergencies. My best advice is to pick a side in the Debate and get moving on whichever one you pick . Whether you decide to save first or last doesn’t matter . What matters is you take action to get the debt relief you crave.

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