The classic personal finance quandary is this: Save up or pay down debt? Normally, it is a good idea to come to a sort of balance between the two. And, during times of recession, it may be especially important to remember to build up long-term savings. But the current state of the economy has many wondering if maybe — just maybe — there is too much emphasis on paying down debt.
The number of Americans (57 percent) unable to set aside money for savings or investments continued to increase in August, jumping five points from June to mark the most unable to save on record. Without the ability to build savings, Americans’ confidence in their long-term financial security is eroding.
This is an interesting trend. In addition to this, the survey found that many people, it appears, are concentrating more on paying down debt than they are on long-term savings. There is no doubt about it; paying down debt is a reasonable personal finance goal. It is essential to reduce your debt if you want to be financially free. But at the same time, it is important to prepare for your long-term needs. At this time, it is vital that you remember to set some money aside for savings and prepare for the future. While you should still work on debt reduction, it is also important not to neglect your long-term savings. It will help you shore up for a more financially stable future.