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Should I Save whilst clearing debt?

This is a question I’m frequently asked, and my answer is usually the same. There are a lot of conflicting opinions online that suggest that if you are in debt, you should solely focus on clearing your debt and postpone saving until you are debt free. While I understand the logic behind this, I believe that focusing all of your efforts on clearing your debt and having no savings or reserves in place can leave you susceptible to falling into further debt in the event of an emergency.

Over the last year I’ve coached over 100 people, a pattern I’ve found amongst some of my clients who are in debt was that prior to getting into debt they either had no savings or a minimal amount- when a need arose, they did not have sufficient funds to cover it and resorted to credit cards and loans.

In my opinion if you are currently in debt you should focus on clearing your debt but also aim to build up an emergency fund that you can utilise should an urgent need arise. This would provide you with an added level of security and peace of mind. I’d suggest working towards saving up 1 months’ worth of your expenses in an easy access savings account as a starting point. Once you’ve cleared your debt or reduced it significantly you can then decide whether to continue to build your emergency fund to cover 3 months’ worth of your expenses and so on.

If you live in the UK and are struggling with debt you can access free debt advise via the following charities: 1) Stepchange:

2) Debt advise foundation:

3) National debtline:

If you’re ready to break bad finance habits, change your mindset when it comes to money and learn how to effectively manage your finances book in a Finance 101 one to one session.

Your Finance P.T



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