• Determine where to put each dollar.dollars image by Marek Kosmal from Fotolia.com
  
  

Debt Adds up

• Paying off bills is advantageous because debt can carry upward of around 30 percent interest, which means you pay for something you never see. Debt should never be ignored because it never goes away entirely. Even if you file bankruptcy, your choice can follow you through job searches and mortgage applications for about a decade. Put a certain amount you can afford to put toward debt monthly.
  
  

Emergencies Happen

• While paying off debt, you want to have around $500 to $1,000 on hand for emergency repairs and other issues. This allows you to avoid giving extra money to credit-card companies for interest payments. When you finish paying all debt besides your mortgage, begin a full emergency fund. Keep about six months to a year's worth of spending for job losses and emergency medical bills.
  
  

Bottom Line

• Author Jean Chatzky who wrote the book "You Don't Have to Be Rich," says, "Why bother to become a better saver? Because boosting your saving prowess can have a huge emotional payoff. Nine out of ten savers say they're 'happy' with their lives." Hold on to some money each month. Saving money is especially important to lower-income families who cannot pay off debt and afford necessities in the same month.