It’s one of the most common questions financial advisers hear: should I prioritize paying down debt or building up savings?
Americans have a cozy relationship with debt – student loans, credit cards and car loans are commonplace. The Federal Reserve said that consumer borrowing rose $24.5 billion in May alone to hit almost $3.9 trillion. And that doesn’t include mortgage or real estate-secured debt, like home equity lines. Add rising interest rates to that mix and you’ve got quite the budget burden.
Debt can help advance your life, for example by paying for an education to get a job or buying a car to get to work. But paying it back also uses up money that could be set aside for emergencies, retirement or other expenses. Research shows most Americans are ill-prepared to face a minor financial hiccup, let alone the cost of retirement.
So how do you meet these competing demands? We talked to a few financial experts for their tips.
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