Should I pay off debt or save money first?

It’s a common question.
In this episode, we’ll answer that question for you and give you some great pointers, so you know the best place to start.

If you have a reasonable amount of debt and little in savings, it can be difficult to know where to start. So the question is:

“Do I begin by saving or do I start by paying off debts?”

Because both are causing some stress.

So there’s a correct answer based on purely crunching the numbers. And there’s a correct answer when it comes to YOU. And they are not necessarily the same answer!

So today, we’ll talk about the difference between the two and how to proceed in a way that will serve you best.



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Now, if you’re currently working towards a very specific goal, for example, wanting to buy a property – then you should be speaking to your mortgage broker or financial advisor because there may be some specific factors that influence your options.

But outside of that, let’s talk about what is generally the best approach for most people faced with the choice:

Do I pay off debt first or do I save money?

So on a numerical basis, it usually makes sense to start paying off debt as quickly as possible.
That’s because debt is working against you by accruing compound interest. You’re being charged interest on your debts. And if you don’t stay on top of that, you will be charged interest on the interest… and then interest on the interest on the interest.. and so on.

This is how so many people get into a situation where their debts get out of control to the point that they can’t stay on top of them anymore – let alone pay them down.

And on the other hand, if you don’t have a lot of savings in the bank right now, that can be super stressful. And when we look at how that makes you feel about your finances – stressed about money, worrying, etc, that may be the deciding factor for you on where to start.

Because as much as numerically it makes sense to get on top of that compound interest, vibrationally, the correct answer is actually to do whatever is going to help you FEEL better first.

Because as you start to feel better about your finances, you start to align with abundance more easily. And that means that you can start to generate and attract more money into your business and life.

So the right answer for you may be different to what makes numerical sense, just because if you don’t get a little bit of money in the bank to fall back on in case of emergency, you won’t be able to sleep at night. And the stress of that alone is going to cause you to keep attracting problems rather than more money to help you get out of the situation.

In a moment, I’ll share with you a great ‘best of both worlds’ approach that tends to help most of my students.

But before that, I’d like to know:

What stresses you out more? Lack of savings or debt? Let me know in the comments!

One of the traps people fall into when they start deliberating whether to save or pay off debt, is thinking they have to do it all at once. They think about the totality of it all.

For example, they may want $20,000 cash in the bank to fall back on in case of emergency. That’s a lot of money! So the thing to remember is that you don’t have to do it all in one hit.

The same goes for debt reduction. You don’t have to pay off ALL your debts at once – or even in a row!

So the trick is to break it down.

When you break it down into little micro goals and smaller milestones, you can actually swing between the two areas of focus and move ahead faster. 

The key is still to always focus on just one at a time.

Let me give you an example:

Say you owe $10,000 on credit cards and want $10,000 cash in the bank. That’s the big end goal.
But we can break that down. We might start by just aiming to get $1,000 cash in the bank so you can sleep at night. And then if the car breaks down or the electricity bill blows out, you have it covered.

So you can start there. That’s your first focus and you need to focus ONLY on that while you park everything else.

Once you’ve gotten there, THEN you can shift your focus to the next micro goal.

And that may be paying off the smallest of your credit cards.

So you choose micro goals rather than doing all of it at once.
And once that micro goal has been achieved, you can switch to another one.

And as you continue working your way through the micro goals, you end up achieving your bigger goal!

We actually help you do all of this and more in the Magnetic Money™️ System BOOTCAMP.
It gives you all tools, systems and info you need to set up a money system designed for you that will and systematically help you achieve your goals. You can check it out here.

And if you want to get started by focusing on just reducing debt, then check out the ‘Freedom from Debt’ system here.

Okay, I hope this has been really helpful and that you now have an idea of which micro goal you want to start with!

Let me know in the comments! Do you have more clarity now? Where are you going to start? What will your first milestone be? I

Remember – abundance is an inside job but there are things we need to do on the outside to help it to flow.

xx Miriam


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