While you may be concerned with shifting your debt as quickly as possible, you also shouldn’t overlook the need for some savings. You might be keen to head off on your annual vacation, you might need to replace the old banger sitting on your drive, or you might simply want to have some readies in the bank should an emergency occur. However, if you aren’t back in the black yet, it can be tempting to use every iota of disposable income on clearing your credit card and paying back your loans. This isn’t always the best use of your cash. There is an art to utilizing your monthly paycheck in the most financially astute way possible. Take a look at why you should also be saving for a rainy day.

You Are Not Immortal

Even though you like to think of yourself as a fit and healthy individual who partakes in the odd wheatgrass shot, loves nothing more than downing a superfood smoothie and ventures to the gym three times a week, you cannot account for the actions of other people. You may be the safest and most cautious driver in the world, but if a drunk gets behind the wheel of a car and causes a collision that sees you injured, you may need to call upon the services of a highly experienced personal injury attorney and this costs money. Clearing your debts, while admirable, won’t give you access to a savings pot and could see you plunging further into the red.

Big Ticket Items

Many people see credit cards as the gateway to accessing items that they otherwise might not be able to afford. For example, you may see a swanky new fitted kitchen complete with integrated appliances, granite worktop and shaker style units and fall totally head over heels for the glossy showroom look. Just because your credit limit will allow for the purchase doesn’t mean you should go for it if this means eternally paying off the minimum each month barely eating into the interest leaving you incapable of saving. Sometimes you need to be patient, save up and then purchase your dream kitchen safe in the knowledge that you haven’t put your financial health in peril.

Emergencies Happen

It’s much better if you are able to pay for your car to be fixed out of a rainy day fund rather than extending your loan. Instead of shifting every bit of debt in the fastest time possible, opt to use two-thirds of your disposable income each month to shift the credit card balance and put the remaining third into a savings account. This way, should your little darling require medical treatment or the dog needs an urgent vet visit you aren’t merely re-adding to the debt total. If you find it tricky to budget, use one of the many free spreadsheet templates online to record your expenditure and see if you can shave off some of the pennies from your outgoings.

Everyone wants to be debt free, but you have to achieve this in the most sensible way. The hare didn’t win the race, so try and take on a more tortoise mindset when it comes to getting back in the black and saving for a rainy day.