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Dont Save When You Owe Money.
 People are funny animals. We don't always do whats best for us - rather, we do what feels best, and try to wipe out any reasons why it may not be the right thing to do. Perhaps 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 building a cornerstone for your future, whilst paying off your debts feels like you're throwing your hard cash down a hole. That money is for the kids education, or for improving your place of residence, or whatever else - and it's in an account making a good rate of interest. What can be wrong with that? Lots, if you owe money.
Dont Be Fooled.
There are almost no savings institutions that will let you have interest rates as high as the ones credit cards charge. Heres something to consider: if you have $10,000 in a bank account pulling in 5% per year and $5,000 on a credit card at an interest rate of 20% per year, how much hard cash do you have? After just five years, the answer is effectively zero - your owings would have grown to as much as $12,500, the equal amount of money that your savings are now worth.
You may not think it now, but it actually is a good deal better to pay off your owings. If you used one half of your savings to pay off that debt, youd be in a much better position that it's really awesome. You avoid five years of compound interest on the debt, but you still get to hang on to $5,000 in your bank account, making interest - after five years, that's approximately $6,380.
If youd still rather keep your savings intact rather than using them to pay off your debts, ask yourself this elementary question: is your pride worth $6,380 of your familys cash?
Consider Your Financial Well-being.
Once you have sufficient money to pay off your debt, theres absolutely no reason to hang on to it. Debt is for people who don't have the money, and have 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 savings bank, then youre in effect paying for the privilege of borrowing your own cash from them. Why on earth would you do that?
There are additional benefit's to lowering your debt with your own money. Youll be less distressed about your debts, and your credit statement will show that you were able to pay everything back - getting you a much better interest deal if you should have to go into debt again.
I know it can be hard. You just have to remember that any money you've saved hasnt actually been saved at all. Its money you ought to have been spending as an alternative to buying things with a credit card. Yes, it feels much worse to spend money thinking that youre spending away your children's education - but always bear in mind that whenever you use a credit card to spend that same amount of money, youre spending away your future, plus interest. In any event, if you've got the debt, then that money has already been spent - stop denying it to yourself.
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