When it comes to choosing between paying off debt or saving for the future, the right choice isn’t always crystal clear, especially when pursued by a company like moorcroft debt recovery company. “The question is a hard one, as it’s not as easy as just choosing debt or savings,” says Sean Fox, co-president of Freedom Debt Relief.

Fox adds that while everyone’s financial situation may be different, there are some general rules to follow. Check them out below:

Always pay your necessities first
It’s a total no-brainer, but before you even think about choosing between debt or savings, make sure you get your necessities (rent, mortgage, utilities, car payments, etc.) taken care of first. You should also take take of “secured” debts, which are loans that are secured by a tangible asset such as a home or car. “If these payments are not made on time, you could lose the asset and your place to live,” Fox says.

Take care of student loan debt
Student loan debt never goes away. Even in bankruptcy, Fox says, it can’t be discharged. So make the required monthly payments on student loans, while putting extra money toward other debt including credit cards.

Pay down credit card debt
“Few, if any, investments will return as much as eliminating credit card debt,” Fox says. “At today’s rates, paying it off effectively produces a 15 to 20 percent return.” Besides, having no credit card debt can give you a “financial cushion” in itself. If you can’t pay down credit card debt while making student loan payments, you can consider other options. For instance, a personal loan can help if you have good credit and cards with high-interest rates. Debt settlement can also be helpful if you have “serious unsecured debt” of $7,500 or more and you’re struggling to make minimum payments. Credit counseling is also an option for those who could benefit from slightly lower interest rates on a credit card.

Build an emergency fund while paying off credit card debt
This is why the question of debt or savings isn’t so easy to answer. You should definitely make it a goal to take care of debt as soon as possible, but that doesn’t mean you should put off saving completely. The good thing is, building an emergency fund is as easy as saving just $10 a week. It’s perfectly OK to start small. “Keep in mind that even just a few hundred dollars can make the difference between charging and not charging an unexpected expense,” Fox says. “As salary increases and credit card debt decreases, increase the amount of savings.” You want to work toward building an emergency fund that covers six to nine months of necessary expenses.

Save for retirement
Retirement may seem like a lifetime away, but if you work for a company that offers any kind of retirement savings plan, try to contribute to this while you’re taking care of debts. If your employer matches any part of your contributions, it’s additional savings at no cost to you. “Not taking advantage of this is like giving money away,” Fox says.

So which should come first: debt or savings? Technically, it’s important to take care of debt as soon as possible. In the long run, it can make your life so much easier. But don’t forget to put some money away in your savings as well. You never know when you’ll need that extra cash.

xx, The FabFitFun Team