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Dont Save When You Owe Money.
 Humans are curious creatures. We don't always do whats right for us - instead, we do what feels best, and try to wipe out any reasons why it might not be the soundest 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 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 throwing your money into a hole. That money is for the kids education, or for improving your house, or whatever else - and it's in an savings account bringing in a valuable rate of interest. What can be unreasonable about that? Lots, if you are in debt.
Dont Be Fooled.
There are virtually no savings accounts that will give you interest rates anywhere near as high as the ones credit cards charge. Heres a question: if you have $10,000 in a savings account earning 5% per 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 - what you owe would have grown to as much as $12,500, the equal total that your savings are now worth.
You may not think it now, but it truly is a great deal better to pay off your debts. If you used half your savings to pay off that debt, youd be in such a better position that it's truly astounding. You avoid five years of compound interest on the debt, but you still get to keep $5,000 in your bank account, making interest - after five years, that's roughly $6,380.
If youd still prefer to keep your savings intact instead of using them to pay off your debts, ask yourself this elementary question: is your pride worth $6,380 of your familys hard cash?
Think of Your Financial Health.
Once you get enough 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 banking company, then youre effectively paying for the privilege of borrowing your own cash from them. Why would you do that?
There are additional benefit's to getting rid your debt with your own savings. Youll be less strained 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 should need to go into debt again.
I know it can be hard. You just have to be mindful 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 nest egg - but always remember that when you use a credit card to spend that same amount of money, youre spending away your future, plus interest. Anyway, 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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