Should you pay off debt first or build savings first?

[ForumPhantom38]

Genuine question for anyone who's actually had to make this call, is it smarter to aggressively pay down debt first or build up savings before tackling debt seriously?

[ShawnMichaels_99]

Most financial guidance suggests building a small emergency fund first, often around 500 to 1000 dollars, before aggressively attacking debt, purely so an unexpected expense doesn't force you back into more debt

After that baseline cushion exists, the math usually favors paying down high interest debt aggressively, since credit card interest rates typically far exceed what a savings account earns, meaning debt actively costs you more than savings actively earns you

The exception is if your debt carries unusually low interest, in that case building savings and even modest investing alongside minimum debt payments can make more sense mathematically