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Should You Prioritize Debt Or Savings? Take This Quiz To Find Out.

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Hunter Coleman

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The ColemanJohnsGroup
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Navigating your finances often leads to a critical crossroads: should you focus on eliminating debt or prioritize saving money? This complex choice affects immediate and long-term financial health, making it a crucial consideration for anyone looking to secure a more stable financial future.

Should you pay off debt or save money first?


Answer the quiz below to gain valuable insights on whether to prioritize debt or savings.

Debt And Savings: Overview

Debt is an amount of money borrowed by one party from another, under the condition that it is to be paid back at a later date, usually with interest. It comes in various forms, such as credit card debt, student loans, mortgages, and auto loans, each with its own terms and conditions.

Debt can significantly impact personal finances , influencing cash flow and the ability to save or invest. Furthermore, it affects your credit score , a critical factor in financial health. A high level of debt, especially when unmanaged, can lead to a lower credit score, making it more challenging to obtain favorable loan terms in the future.

Savings, on the other hand, refer to the portion of income not spent on immediate expenses and set aside for future use. The benefits of savings are manifold, including providing an emergency fund to cover unforeseen expenses, enabling investment opportunities, and funding future financial goals.

When deliberating between paying off debt and saving money, several key factors must be considered, including income and expenses, interest rates, and your financial goals and priorities.

Your income directly influences your ability to allocate funds towards debt repayment and savings. A higher income might provide the flexibility to pay down debt while still contributing to savings aggressively. Conversely, a lower income may require a more cautious approach, prioritizing essential expenses and minimum debt payments before anything else.

Budgeting is an indispensable tool in this equation, offering a blueprint for managing expenses. A well-crafted budget highlights areas where spending can be optimized, freeing up more resources for debt reduction and savings.

The impact of interest rates also warrants attention, as they affect both the cost of carrying debt and the potential growth of savings. High-interest debts, such as credit card balances, can quickly spiral out of control, making them prime candidates for early repayment. Meanwhile, the interest rates on savings accounts and investment returns can influence how much you gain from stashing away money.

Moreover, your financial goals and priorities can significantly influence the choice between paying off debt and saving. For someone facing high-interest debt, the immediate priority might be to reduce this burden to avoid accruing excessive interest.

Others might prioritize building an emergency fund to provide a financial buffer for medical bills or car repairs. Long-term objectives, like saving for a home or retirement, also factor into the decision, dictating a strategy that balances present needs with future aspirations.

The Pay Off Debt Vs. Save Money Quiz


For each statement below, indicate how much you agree or disagree using a scale from 1 to 5, where:

1 = Strongly Disagree, 2 = Disagree, 3 = Neutral, 4 = Agree, and 5 = Strongly Agree.

After completing all questions, tally your points for an interpretation of your total score.


  1. My debt feels manageable and does not overwhelm me.
  2. I have at least three months’ worth of living expenses saved up.
  3. My income consistently covers my expenses each month.
  4. I feel secure in my job and the stability of my income.
  5. Eliminating my debt is currently my highest financial priority.
  6. I actively contribute to my savings on a regular basis.
  7. I find the interest rates on my debt to be reasonable and not burdensome.
  8. I have specific financial goals that I plan to achieve within the next 5 years.
  9. I rarely feel stressed about my financial situation.
  10. I adhere to a budget to manage my finances effectively.


If your total score falls between 10 and 20 points , you might be facing considerable financial challenges. This score range suggests that debt may feel overwhelming and unmanageable, with high interest rates exacerbating the situation.

Additionally, the lack of a sufficient emergency fund could contribute to financial stress, making it difficult to cover unexpected expenses or income disruptions. In this scenario, prioritizing debt repayment is essential, especially targeting high-interest debt to reduce the overall financial burden.

Establishing a small emergency fund, even if it’s just a few hundred dollars, can provide a buffer against unforeseen expenses. This approach can help prevent further debt accumulation. The goal is to transition to a more stable financial position where debt feels manageable and savings can gradually increase.

For those scoring between 21 and 35 points , your financial situation appears to be a mix of strengths and areas for improvement. This score range reflects a moderate level of financial management, where you might have some control over your expenses and debt, but still face challenges in fully securing your financial well-being.

You may be making efforts to save and manage your debt, yet not to the extent that provides complete financial security or aligns perfectly with your financial goals.

A balanced approach to addressing your financial concerns could be most effective. This might involve reassessing your budget better to allocate resources towards debt reduction and savings growth, ensuring that any debt carried has manageable interest rates, and setting aside regular contributions to an emergency fund.

Reevaluating financial priorities to ensure they align with your short- and long-term goals can provide clearer direction and motivation. Consideration of further financial education or consulting with a financial advisor could provide additional strategies and insights to enhance your financial stability and growth.

Achieving a score between 36 and 50 points suggests that you are in a relatively strong financial position, likely feeling secure in your income stability, managing debt effectively, and consistently contributing to your savings.

This indicates a healthy approach to financial management, where you are not only meeting your current financial needs but also planning for the future. In this position, you might focus on further financial growth, exploring investment opportunities to build wealth over time, and continuing to save for future goals.

Maintaining a balance between managing any remaining debt and investing in your future is key. It’s also important to reassess your financial strategies as your situation evolves, ensuring that your budget remains aligned with your goals and adjusting your savings and investment plans as necessary.

Final Thoughts

Consider this quiz a starting point in your financial planning. Remember that while a self-assessment can offer valuable insights, your unique challenges and opportunities highlight the need for professional advice.

Consulting with financial advisors, planners, and counselors brings an added layer of expertise and personalized guidance to your financial strategy. These professionals can help you navigate through the complexities of your financial landscape, from devising strategies to optimize debt repayment and enhance savings growth to identifying viable investment opportunities.

Their advice is tailored to your situation, ensuring your financial plan adapts as your circumstances change. It keeps you aligned with both your short-term needs and long-term aspirations.

Incorporating the expertise of financial professionals into your decision-making process is a critical step towards a more secure financial future.

By True Tamplin, Contributor

© 2024 Forbes Media LLC. All Rights Reserved

This Forbes article was legally licensed through AdvisorStream.

Hunter Coleman profile photo

Hunter Coleman

Financial Advisor
The ColemanJohnsGroup
Schedule a meeting