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Dont Save When You Owe Money.
 Human beings are curious creatures. We don't always do whats right for us - rather, we do what feels best, and try to wipe out any reasons why it might not be the right 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 base for your future, whilst paying off what you owe makes you feel like you're throwing your 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 valuable rate of interest. What could be unreasonable about that? A great deal, if you have debts.
Dont Be Fooled.
There are almost no savings institutions that will let you have interest rates as high as the ones credit cards wrest from you. Heres something to think about: if you have $10,000 in a bank account bringing in 5% a year and $5,000 on a credit card at an interest rate of 20% per year, how much hard cash do you have? After only five years, the answer is effectively zilch - your owings would have grown to about $12,500, the same sum of money that your savings are currently worth.
You might not believe it at present, but it really is much better to pay off your owings. If you utilized one half of your savings to pay off that debt, youd be in a much better spot that it's really awesome. You avert five years of compound interest on the debt, but you still get to hang on to $5,000 in your savings account, pulling in interest - after five years, that's around $6,380.
If youd still rather keep your savings intact rather than using them to pay off your debts, ask yourself this simple question: is your pride worth $6,380 of your familys money?
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 need 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 in effect paying for the privilege of borrowing your own money from them. Why on earth would you do that?
There are other advantages to paying off your debt with your own money. Youll be less worried about your debts, and your credit statement will show that you were able to pay everything back - getting you a much smaller interest rate if you ever have to go into debt in the future.
I know it's never easy. You just have to remember that any money you've saved hasnt actually been saved at all. Its money you should have been spending instead of making purchases 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 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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