Should you save and pay off debt at the same time?

[Freespirit211]

I've got another thread going just now but hoping some people can help me with this too.

I've had some excellent advise on my other thread but it's left me wondering, should you save for a rainy day at the same time as trying to pay off a credit card? Or should you throw any spare money at the credit card and dip back into it when you need to?

Appreciate any advice :)

We have a cc debt of 3k and savings of 2k. The cc is on an interest free card as a balance transfer with a 6k limit.

The 2k savings is emergency money. Dp is self employed so shit happens sometimes. If I was to transfer it to the cc I would have 1k debt and 5k of credit. However if I couldn't afford to make the minimum payment I would quickly lose the 5k credit I have available.

I am also stricter with the savings account than the cc. So I never, ever use the savings but will occasionally use the cc for something not 100% essential but something we want like a family day out etc. I would be more tempted to use the card than the savings account which I know is wrong but that's life.

I have set up the dd to pay more than the minimum payment in the card and the plan is to make additional payments between now and Christmas to significantly reduce it. Hopefully it will be paid off in full by next may.

So although you pay interest on cc debt (unless you can get a 0% one) for me psychologically it makes more sense to have a fucked it fund and steadily repay the card. And I try and save up separately for Christmas and birthdays etc. I find it easier to overspend on the cc than I do actual real money (and dp is a scattercash) so we spend less if it's coming out of an account than on a card.

@JumboLina no we use ynab to track all savings and spending. Google it :) I love it as a budgeting tool. All our money is ear marked every month, we know where it needs to go, where it goes and where we want it to go.

Ynab has great forums with great advice and kind people who share their stories in the journal section.

Personally I did as I used my credit card in the first place for an emergency. I cut it up and started paying off what I could. Didn't want to get another so I put some money aside as well each month in case I needed it.

What's the point of clearing a credit card only to find your going to need it again and start the cycle all over? Interest is pretty much a pittance anyway.

Work out all your outgoings for the month and split the remainder in half- half for savings, half for spends.

We separate accounts for holidays, a rainy day fund and savings for Christmas- we deposit money into this account 10 months of the year and at the end of November we withdraw it and spend it on Christmas presents. The money that we would save in November and December is then spent on a family Christmas treat- ie theatre and dinner.

Definitely have some back up funds so that you don't end up putting more or on the credit card.

I've got one account for holidays/Christmas, and one for house/car expenses. They're not really savings, but more of a way of spreading costs over the year and budgeting for them.
£100 a month into each account, and that's more than enough to pay for Christmas, a cheap holiday, servicing the car and probably enough to be able to replace whatever household appliance decides to pack up that year. Before I would just add it to the credit card debt and end up paying interest on it.

If the savings accounts build up (rare) then the excess goes to paying down the credit card.

Switch to a 0% credit card asap though, and set the direct debit to a comfortable amount to actually start clearing the debt.