Hi everyone. Thanks for downloading the Money Girl Podcast. I'm Laura Adams, the author of Money Girls Smart Moves to Grow Rich.

A reader named Sierra asks,

I really want to get out of debt,

but I also know that I should be saving money. Is it better

for me to pay off a maxed out credit card or to build up my savings? Whether it's better

to get out of debt or save money is a question that most of us have struggled with.

It's like asking whether it's better to exercise or eat right.

We actually need to do both, but we don't always have enough money, time, or motivation.

So how do you know which option will make the most of your money when you need to choose between getting rid of credit card debt and

saving.

I'll discuss each choice so you know what's best for your financial situation and I'll

give you an action plan to follow.

First, let's talk about the benefits of getting out of debt.

If you're a regular money girl reader or podcast listener, you already know that debt can be dangerous.

Every dollar you owe a creditor is a dollar that you can't save or invest to build wealth for yourself.

It's a drain on your financial resources to have too much debt for your level of income

or to pay high interest rates. But not all debts are created equal.

Some come with low interest rates and built-in tax deductions that make their net

cost relatively inexpensive.

Mortgages and home equity loans are at rock bottom rates right now,

and the interest is deductible when you itemize on your taxes.

Student loans also come with tax deductions or credits up to a certain amount,

...