Mika
VIP Contributor
Saving is very important, and equally important is investing. When you save regularly, you will be able to build emergency funds, and retirement funds, as well as invest. When you invest, your wealth will grow. However, how can you save and invest when you have debt? In other words, if you are supposed to pay $100 as a loan repayment installment, how can you save $100 or invest $100?
If you are earning well, it might not be difficult to save and invest even when you have to pay a loan. However, with limited income, it is not possible. If you have debt, the first priority should always be on paying it off. The interest you receive on your savings is not much, however, interest on the debt will be much higher. Nevertheless, investing can give you a better return, sometimes you might receive more return on investment compared to your payable interest on the debt.
The best strategy is to pay off debt and also continue investment.
If you are earning well, it might not be difficult to save and invest even when you have to pay a loan. However, with limited income, it is not possible. If you have debt, the first priority should always be on paying it off. The interest you receive on your savings is not much, however, interest on the debt will be much higher. Nevertheless, investing can give you a better return, sometimes you might receive more return on investment compared to your payable interest on the debt.
The best strategy is to pay off debt and also continue investment.