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Dont Save When You Are in Debt.
 Human beings are funny animals. We don't always do whats right for us - rather, we do what feels best, and try to blot out any reasons why it may not be the best thing to do. Possibly that's the reason there are so many people who have both savings and debts.
Its an Issue of Psychology.
Yes, it feels better to save. Saving makes you feel like you're constructing a base for your future, whilst paying off what you owe makes you feel like you're throwing your hard cash in to 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 gaining a useful rate of interest. What could be wrong with that? Lots, if you are in debt.
Dont Be Fooled.
There are about no savings institutions that will give you interest rates as high as the ones credit cards wrest from you. Heres food for thought: if you have $10,000 in a bank account making 5% a year and $5,000 on a credit card at an interest rate of 20% per year, how much money do you have? After just five years, the answer is effectively $0 - your owings would have grown to about $12,500, the equal sum of money that your savings are now worth.
You might not think it now, but it really is a great deal better to pay off your debts. If you utilized one half of your savings to pay off that debt, youd be in a much better spot that it's truly 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, pulling in interest - after five years, that's approximately $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?
Think of Your Financial Well-being.
Once you have 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 banking company, then youre effectively paying for the privilege of borrowing your own cash from them. Why on earth would you do that?
There are more benefit's to lowering your debt with savings. Youll be less distressed about your debts, and your credit report will show that you were able to pay everything back - resulting in getting you a much better interest deal if you ever have to go into debt again.
I know it's 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 instead of buying 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 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 that cash in the bank has already been spent - stop denying it to yourself.
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