Investing money can be a good way to make more long-term profits and perhaps achieve stability. However, if you are in debt, it is best to review your stocks before starting investment as it is known that, To pay the debts, you need the money and to invest, an amount is required.
Because of this, many people prefer to pay off debts rather than invest, others do the opposite and there are still some who prefer to do both.
Why can’t I invest and pay off the debt at the same time?
The vast majority of investments (especially low-risk ones) yield much less than the interest rates charged on the debt. To give you an idea, while we pay 10% per month to credit card companies, the savings account yields less than 0.6% monthly. As we can hardly get a higher income than debt, it is easy to see that debt should be a priority.
How to plan to pay off debt and save?
1) Organize your accounts
The first step is to know how your accounts are doing. This requires making a household budget to control how much you get and how much you spend.
2) Evaluate Your Debts
Do an analysis of all the debts you have and which ones are charging the most interest. These are the ones you need to eliminate first. Renegotiate debts, trade for cheaper ones, or if you can.
3) Always save
Saving money means using interest to our advantage and not against it. The minimum savings recommended is to invest 10% of what you earn every month.
Pay off your debts
So pay off your debts first and only then start investing. Nothing prevents you from starting investment studies, looking for opportunities and evaluating the ones that best fit your profile.
In fact, you have an obligation to worry about your financial health. After all, it is not because you are still paying off debts that you should not worry about investments.
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