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Dont Save When You Are in Debt.
 Humans are funny animals. We don't always do whats right for us - rather, we do what feels best, and try to blank out any reasons why it may not be the right thing to do. Perhaps that's why there are so many people who have both savings and debts.
Its an Issue of Psychology.
Sure, it makes you feel better to have savings. Saving makes you feel like you're building a foundation for your future, whilst paying off your debts makes you feel like you're giving your hard cash into a hole. That money is for the kids education, or for doing up your home, or whatever else - and it's in an bank account making a useful rate of interest. What could be wrong with that? A great deal, if you have debts.
Dont Be Fooled.
There are almost no savings institutions that will offer you interest rates as high as the ones credit cards charge. Heres something to think about: if you have $10,000 in a savings account realising 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 just five years, the answer is effectively nada - what you owe would have grown to about $12,500, the equal total that your savings are currently worth.
You might not imagine it at present, but it really is a good deal better to pay off your debt. If you utilized half your savings to pay off that debt, youd be in such a better spot that it's really amazing. You avert five years of compound interest on the debt, but you still get to hang on to $5,000 in your bank account, pulling in interest - after five years, that's about $6,380.
If youd still prefer to keep your savings intact instead of using them to pay off your debts, ask yourself this simple question: is your pride worth $6,380 of your familys hard cash?
Consider Your Financial Well-being.
When you get enough cash to pay off your debt, theres absolutely no earthly 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 want as much of your financial resources as possible to be savings, not debts. If your savings account and credit card are with the same bank, then youre effectively paying for the privilege of borrowing your own cash from them. Why on earth would you do that?
There are more advantages to lowering your debt with your own money. Youll be less distressed about your debts, and your credit report will show that you were able to pay everything back - getting you a much better interest deal if you ever have to go into debt in the future.
I know it's hard. You just have to remember that any cash you've saved hasnt really been saved at all. Its money you ought to have been spending rather than 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 case, if you've got the debt, then that money has already been spent - stop denying it to yourself.
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