When deciding whether to first repay debt or save, the answer is that overall it is a combination of both.
Long term, we want a good level of savings to protect us. This is known as an Emergency Fund. But if we did that before clearing debt, it would cost us more and take a lot longer.
So, clearing debt before having large savings make sense.
BUT, unless we have a cushion of at least some savings, we can end up going further into debt.
So, before we repay that debt, let’s talk about the mini-Emergency Fund.