The challenge of paying down debt, whether college loans, house payments, or credit card debt, while saving for the future can be daunting—especially in a weak economic environment. For many, paying off debt is easier and more emotionally satisfying than building up savings. That's because debt obligations can be whittled down in to concrete chunks, while savings goals are more ambiguous and can change as easily as changing one's mind about how much to save. And, of course, contributions put into regular savings can be taken out and spent on a whim.
The top three financial priorities for African Americans, each chosen by more than half of respondents in a recent study, are reducing debt, saving for retirement, and building an emergency savings account.
But is paying off debt ahead of saving for the future always a good idea?
