Age Money or Pay Off Debt?

Hello YNABers! I am relatively new, just a few months in, and I am struggling with whether or not I should focus on aging my money to at least 30 days or paying off debt? I am really focusing on debt right now but I want to be sure I start off on the right foot. Thanks!

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  • Paying off debt is always a good choice. Especially high interest debt. That and not going into further debt are a great start.

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  • Both approaches can work, but there are situational things that could influence which might be better. 

    My average recommendation is follow the method, get off the credit card float ASAP,  make sure you really are following rule #2 (embracing your true expenses) before finding other places for the money, and build up an emergency fund while also paying off debt.  By the time you have a decent emergency fund it is likely your age of money is healthy as well, then you can transition more money to cover debt.

    References:

    *  Get very comfortable with the method and the spirit of it.
    https://www.youneedabudget.com/method/

    * Get off the credit card float.
    https://www.youneedabudget.com/are-you-riding-the-credit-card-float/

    * Embrace your true expenses
    https://www.youneedabudget.com/method/rule-two/

     

    Those are general guidelines I would give, but consider these depending on your situation, but follow the approach that gives you more peace of mind. Some it is getting rid of debt and saving more money in the long run, others it is the security of being able to cover the unexpected, and there is a lot of space in between those extremes:

    * Unstable income: I'd suggest prioritizing an emergency fund.

    * High interest rates that eat into your ability to plan for true expenses: Try to consolidate or move the debt somewhere. If that doesn't work, yes absolutely focus on debt until you have some breathing room.

    * Plenty of stable income: Priority #1 debt until remaining debt is very low interest (such as student loans) then focus on emergency fund and saving for those vacations and extras.  Saving for vacations and extra's is the #1 thing that ages my money.

    No matter your approach, once you start paying off debt accounts and have money sitting around accumulating for future expenses or extras, you'll find your money becomes boring . 

    Good luck on your new way of managing money!
     

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