What should come first paying off debt or saving?

 The answer is going to be different depending on our individual situation, there isn't one answer fits all. There are advantages in both situations.

  Paying off debt first (this works best for me)

      1. Peace of mind

      2. Frees up income, higher cash flow

      3. Less debt usually equals higher credit scores

       

 Saving first 

      1. Gives you a cash cushion 

      2. Starts the magic of compounding sooner

      3. Gets you into the habit of paying yourself first

 I recommend looking at the interest rates in either situation. If you can get a 3% return at the bank, why pay back a car loan that is 1%? When you have a mortgage rate of 4.5% make an extra payment instead of saving it at 3%. It's about making the decision that maximizes your return. Finwiz.