I asked some friends the other day what was harder – paying off debt or saving – and here were the results after 144 people responded:
39% thought saving was the hardest, and paying off debt clocking in at 33% – six percentage points lower. But on the plus side, it means 72% of you find “being awesome” comes easy! And this is a pretty scientific study, so that should make you feel good ;)
Personally, I fall in the “saving is harder” camp. Mainly because the end goals always seem so arbitrary and flexible, while with the debt there’s a solid – “this is exactly how much you have to pay off” – type mission to it all. Once you pay it off, it’s gone. With saving, you can always have/want more, right?
Saving also doesn’t seem as catastrophic to your finances as lugging around debt does, even though it’s pretty damn important. And factually speaking, debt almost always costs you more money in the long run – easily seen by just comparing your bank’s interest rate vs your credit card’s, ugh. So for this reason alone, paying off debt always carries more of a rush factor than saving up cash does.
And then of course there’s the emotional toll of them both. You’d think the more pleasurable route would beat out the one that pisses you off, but studies show time and again how much more we react to fear and disgust than we do more positive feelings. So as much as we love having extra cash in our accounts, most of us would rather nix the debt once and for all and then focus on the niceties!
Here’s a good exercise to go through to see just how much your emotions factor in (or not):
Would you rather… Have $250,000 in cash, but also $250,000 in debt?
Have $0.00 cash and $0.00 debt?
When we asked this question back in February, most people in debt chose the latter, while those out of debt – like me at the time – chose the former. Though of course many of us are opportunists too, and we love dreaming about all the ways we can harness $250k to more than make up for the debt ;)
In either case it’s all pretty fascinating, and yet again proves there’s more to financial management than numbers alone. You can pretend it doesn’t factor in and fight yourself on it, or you can figure out what works the best for you – taking into account both the facts and feelings – to hit your goals much more smoothly. And more often than not, faster too. There’s definitely no “right” way here, that’s for sure.
Here are a few tips for any others who find saving harder than paying off debt like I do. Or if you’re having trouble hitting any goal, for that matter:
- Make sure to have a solid # (or “thing”) you’re shooting for! Don’t just save to save – harness the perk that debt has with knowing *exactly* what you’re aiming for so you can measure your success! Whether it’s a total number like for an emergency fund, or for something like a vacation or down payment on a house.
- Break down your goal into monthly (or per paycheck) mini-goals. You can’t reach any major milestones within a day or week, or even a month/year for most of them, so remind yourself it all takes time and that you have a better chance of success working towards it incrementally than in large chunks. And the faster you put the strategy in place, the faster you get the ball rolling.
- Document it all to stay motivated! I don’t care if you’ve saved a penny or paid off $2.98 of debt – track it somehow so you can watch your progress! One of my favorite ways to do this is by making it visual. The more you see your wins, the more confident (and easier) it gets.
If you’re in the group that finds both saving AND paying off debt hard, well, your mission is to start at the beginning of this blog then and read all 2,182 articles published ’til now ;) You may want to poke your eyes out afterwards, but I promise you’ll be ready to start taking action! And really, isn’t that the point of it all?
(I’ll be quizzing you at the end of it too – so no cheating!)
What do you find harder? Saving or paying off debt?
PS: For more thoughts on this, check out how people responded to this question three years ago when we last asked. It’s an age-old debate!