You can’t save money when you owe money
You ever wonder where the money goes after you leave a store purchasing an item when it dawns on you…I saved $10 on the purchase of this item, where’s the $10?
It’s the same if you attempt to save money while owing money. If you are paying the minimum payments on credit cards, car loans, home, home equity line, student loans you cannot save money.
Yes, I recommend saving 1 -3 months as reserves for those emergencies in life but under NO circumstances can you save money if you owe money.
The interest you pay on the money you owe is always more than the interest you make on the money you’ve saved. Therefore, from a money making perspective you would come out ahead by paying off your debt before you save.
Proving that you can’t save money when you owe money
David Dassow
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