By Debbi King

A couple of week’s ago, I participated in a great Twitter chat with #JustHaves talking about “Your Smart Money Guide”. One of the questions that we covered was “Should you pay off your credit cards or start investing?” I was fascinated by the concept of having to choose one or the other. The reality is you don’t have to choose, but you do have to plan.

I totally understand asking the question because trying to do too many things at one time can be daunting especially when it comes to your finances. Many years ago I found myself in what seemed like an impossible situation at the time. I was a single mom, making $10,000 a year and $200,000 in debt. The thought of even taking one positive step was overwhelming much less more than one. But I had to start somewhere and I did. As time went on, I began seeing positive changes and as my money muscles grew stronger, I was able to take on more than one task at a time.


Which brings us back to the question “Should you pay off your credit cards or start investing?”. My answer would be you can do both. But in order to do both successfully, you have to have a plan. The 80-10-10 rule of money has worked very well for me and countless clients. This is where you give 10%, save 10% and spend 80%. Using this formula, you can definitely pay off your credit cards and start investing. And both of these items are keys to wealth. When you pay off your credit cards, you will have more to invest. This is why many people suggest getting out of debt before investing. However, if you can handle it, I believe you should do both because both are vital in your journey to financial freedom. And when you see progress in both areas, you are then motivated to do more to speed up the process of releasing yourself from the burden of debt and jumping on the road to financial freedom.


You have to decide whether you can handle more than one goal at a time when it comes to your money. Personal finance is personal and what worked for me may not work for you. If you choose to do only one thing at a time, then get out of debt as quickly as possible with an added caveat – never leave free money on the table. If your employer matches your 401K contributions, contribute at least up to the match (usually 2%). This is free money and worth every penny.

What I want you to take away today is that the choice is always yours, but you can do both at the same time – get out of debt and invest. With careful planning, it can be done and done successfully.

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