Question by jt6341: How much should I put towards paying off my debt, and how much should I put towards Savings?
About a year ago I occured alot of debt. I’m now back on track, making pretty good money for my age.. I’m trying to figure out how much to pay each month towards my debts and how much to save? Here is a break down of my debt and the interest rates they have: $ 3200 at zero interest until March of 08. (I’m paying each month the amount that it would require to be paid off one month before the interest starts) 2200 in medical bills at zero interest (I pay the minium) 2400 to a apartment complex for breaking my lease early, I just received the notice and havn’t set up payment plans yet. I also have 2200 to a family member who says not to worrry about it to much until I’m caught up again. I know this may not be alot of debt to some people, but i’m only 23 and consider it WAY to much debt. I have around 1000- 2200 depending on my boneses each month to save or pay extra towards my bills. How much should I save and how much should I pay towards my bills? Any help would be great.
Best answer:
Answer by Chicken_Wing__
Always pay off debt if you have the money. The interest rate they are charging is far more than what that money would earn in savings. If you have $ 1000 with 15% interest and you don’t pay it, next year you’ll owe $ 150 more. $ 1000 in an account with an interest rate of say 5%, next year you’ll only have $ 50 more. You’re now $ 100 more in debt because you decided to put it into savings instead of paying off the debt.
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