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Dont Save When You Owe Money.
 People are peculiar animals. We don't always do whats right for us - rather, we do what feels best, and try to wipe out any reasons why it might not be the most effective thing to do. Maybe that's the reason there are so many people who have both savings and debts.
Its a Matter of Psychology.
Yes, it feels better to have savings. Saving feels like you're constructing a cornerstone for your future, while paying off what you owe makes you feel like you're throwing your hard cash down a hole. That money is for the kids education, or for doing up your place of residence, or whatever else - and it's in an savings account earning a valuable rate of interest. What could be unreasonable about that? A great deal, if you owe money.
Dont Be Fooled.
There are just about no savings institutions that will let you have interest rates anywhere near as high as the ones credit cards wrest from you. Heres a question: if you have $10,000 in a savings account making 5% per year and $5,000 on a credit card at an interest rate of 20% per year, how much cash do you have? After only five years, the answer is effectively nothing - what you owe would have grown to as much as $12,500, the equal sum of money that your savings are currently worth.
You may not think it now, but it actually is a good deal better to pay off your owings. If you utilized half your savings to pay off that debt, youd be in such a better position that it's really astounding. You avert five years of compound interest on the debt, but you still get to hang on to $5,000 in your savings account, making interest - after five years, that's roughly $6,380.
If youd still prefer to keep your savings intact rather than using them to pay off your debts, ask yourself this simple question: is your pride worth $6,380 of your familys hard cash?
Think of Your Financial Well-being.
Once you have sufficient cash to pay off your debt, theres absolutely no logical reason to keep it. Debt is for people who don't have the money, and need to borrow it. Debt costs money, and savings make money - you need as much of your finances as possible to be savings, not debts. If your savings account and credit card are with the same banking company, then youre in effect paying for the privilege of borrowing your own money from them. Why on earth would you do that?
There are other advantages to lowering your debt with your own savings. Youll be less distressed about your debts, and your credit statement will show that you were able to pay everything back - resulting in getting you a much better interest deal if you should have to go into debt in the future.
I know it can be hard. You just need to bear in mind that any money you've saved hasnt really been saved at all. Its money you should have been spending rather than making purchases with a credit card. Yes, it feels much worse to spend money thinking that youre spending away your nest egg - but always bear in mind that when you use a credit card to spend that same amount of money, youre spending away your future, plus interest. In any case, if you've got the debt, then those savings have already been spent - stop denying it to yourself.
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