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Dont Save When You Owe Money.
 People are curious creatures. We don't always do whats best for us - instead, we do what feels best, and try to wipe out any reasons why it may not be the most effective thing to do. Possibly that's how come there are so many people who have both savings and debts.
Its a Matter of Psychology.
Sure, it makes you feel better to have savings. Saving makes you feel like you're constructing a base for your future, whilst paying off debt feels like you're throwing your money into a hole. That money is for the kids future, or for doing up your house, or whatever else - and it's in an account making a valuable rate of interest. What can be wrong with that? A great deal, if you owe money.
Dont Be Fooled.
There are about no savings institutions that offer interest rates anywhere near as high as the ones credit cards wrest from you. Heres something to consider: if you have $10,000 in a bank 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 zero - your debt would have grown to in the area of $12,500, the equivalent total that your savings are currently worth.
You might not imagine it at present, but it actually is much better to pay off your debts. If you used one half of your savings to pay off that debt, youd be in such a better position that it's really amazing. 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 instead of using them to pay off your debts, ask yourself this simple question: is your pride worth $6,380 of your familys cash?
Consider Your Financial Well-being.
When 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 have to borrow it. Debt costs money, and savings make money - you need as much of your financial resources as possible to be savings, not debts. If your savings account and credit card are with the same financial institution, then youre in effect paying for the privilege of borrowing your own cash from them. Why would you do that?
There are additional advantages to paying off your debt with savings. Youll be less worried about your debts, and your credit report will show that you were able to pay everything back - resulting in getting you a much smaller interest deal if you ever have to go into debt in the future.
I know it can be hard. You just have to be mindful that any cash you've saved hasnt actually been saved at all. Its money you ought to have been spending rather than buying with a credit card. Yes, it feels much worse to spend money thinking that youre spending away your nest egg - but always remember that when you use a credit card to spend that same 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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