Paying off debt is a wonderful thing. Debt can rack up quickly and is always hanging over your head making you feel guilty and stressed. I think it’s safe to say, in most cases, that paying off your debt should be a financial priority. However, there are times when there are other things to consider in your life, and in those moments, it’s ok to place your debt on the back burner. Here are three times when it’s ok to not make debt payoff your only financial priority.
Saving for Retirement
Although your debt is important, it’s also important to think about your future. The earlier you start saving for retirement, the better. The interest a few years can make to your retirement fund can make a big difference, which is why it’s good to put money away as soon as you can so it can compound interest and build. Furthermore, there’s no reason that you can’t save a little and pay off some debt simultaneously, so don’t use your debt as a reason to wait to save for your future.
When It Interferes with Your Budget
While it may be a good idea to work your debt payoffs into your budget, there may be times when it’s not feasible. If funds are tight a month and it’s a stretch to pay all your necessities, it’s safe to say that your debt can wait. Make sure you really look at your budget, because once you put money towards your debt you can’t get it back, so be sure you won’t need that money later. You have to be able to buy groceries and pay for utilities, paying off your debt shouldn’t mean you compromise your quality of life.
Creating an Emergency Fund
The unexpected happens, usually at the most inconvenient time. It’s important in those moments to be prepared, which is why it’s a necessity to have an emergency fund. If you get in an accident or have to go to the hospital you need to be able to pay for it. That being said, before you put all your finances into your debt, be sure you have started and are building savings for a rainy day. If you don’t have emergency cash, you might be forced to miss debt payments completely. By doing this you can pay some of your debt, all while making sure you’re prepared for anything.
Minimizing your debt is always a good feeling, and most of the time you should work to pay it off as best as you can. However, life happens and unfortunately, if all of your money has gone towards debt payoff, you could place yourself in a tough spot. That’s why it doesn’t always make sense for debt payoff to be your main financial focus. Instead, make other funds and savings your priority and return to your debt later, you’ll be glad you did.
What are some times when your debt has become second priority? How did you handle that?- Kayla