Debt vs. savings? Why you don’t have to choose just one

(InvestigateTV) — A recent Bankrate study found that 33% of Americans owe more on their credit cards than they have in their emergency savings , making many question whether to prioritize paying down debt or adding to their savings.

Kionnie Epps, a financial educator from the website and YouTube channel The Responsible Homegirl, said this is not an either-or situation: it’s both.

“And the reason why I like to say that is because sometimes we will want to pay off the debt, but if we’re not strategic and we’re not careful and we don’t prepare for emergencies,” Epps explained. “We’ll put ourselves in a position where we’ll get deeper in debt if something comes up.”

The first thing Epps recommended is to build an emergency fund. She said people don’t need to have three to six months of expenses saved, but she did encourage them to work to reach about $2,000.

“After you have at least $2,000 saved then I would aggressively attack the debt,” she said. “Now, I like the idea of paying off the high interest debt first but sometimes people don’t necessarily like that. They want to get some quick wins.”

Epps emphasized choosing the strategy that works best for you—whether that’s paying off a smaller debt first for a quick win, or tackling a larger debt over the long haul. But even while you’re paying off debts, she recommends continuing to add to your savings consistently.

She said people should treat themselves like a bill—when you get paid, pay yourself first. Even if it’s just $25 a week into savings, every little bit adds up.

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