Should I Build My Savings or Get Rid of Debt?

The Jesse Mecham Show

YNAB

Kids & Family, Education

4.7 • 1.1K Ratings

🗓️ 15 January 2026

⏱️ 10 minutes

🔗️ Recording | iTunes | RSS

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Summary

According to YouGov, one of the top resolutions for 2026 is saving more money. While Jesse has issues with the concept of "saving" money as he has discussed in previous podcasts, the intention is still clear -- people want to get to a more stable financial position, which (for most) means more cash in the bank and less debt. Jesse also points out that consumer debt continues to hit all time highs, which leads to his approach to the question: should I build my savings or pay off debt?

Jesse urges folks to consider, why do they feel the need to reach for consumer debt in the first place? Reaching for debt regularly, especially pernicious forms of debt like credit cards and buy now, pay later programs, indicates that you aren't aware and in alignment with your true expenses -- the larger and less frequent expenses that you know will happen, but aren't regular monthly bills like rent or utilities. Auto maintenance is a classic example of true expenses -- you know you'll need oil changes, transmission fluid changes, new tires, etc. eventually, but it's not a regular monthly expense.

The trap many people fall into is throwing everything they have into debt payments, only to have a true expense pop up and no cash to pay for it. So they bring out the credit card and fall back into the same cycle that got them into debt in the first place. If you turn your attention away from paying off debt for a bit and instead focus on setting money aside for these true expenses, like tires, then you can reduce your need to rely on consumer debt to cover these. Just setting aside $50 or $100 a month toward these expenses can make you so much more financially resilient, that you no longer need debt and can now begin to pay off debt from a place of stability.

All of a sudden, you are planning and thinking about money like a YNABer!

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Transcript

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0:00.0	Hello, my name is Jesse Meekam with another episode of the Jesse Meekam show, and I'm here each week to obsess out loud about, well, you getting good with money.
0:22.7	That's what I obsess about.
0:24.2	But what does it look like to be good with money?
0:28.9	Most, when they're wanting to start their new year and set some financial resolutions,
0:35.4	UGov, is that what I have here?
0:37.4	Top resolution among Americans was to save more money.
0:41.8	There are a couple problems with that resolution.
0:45.5	I don't want to get into the other side of it where saving money is really a way of just saying you want to spend the money later and we do this weird thing where we save money and then don't want to spend it, which is its sole purpose.
0:58.5	But the other interesting thing about saving money is when you talk to people about how they
1:05.8	want to actually fix their finances, like more one-on-one, they'll often mention debt. They'll want to get rid of
1:12.6	their debt. And saving more money and paying down your debt, both do the same thing to your
1:18.4	net worth. Net worth is your assets, what you own, minus your liabilities, what you owe.
1:24.4	And whether you have more money or have used that money to pay down what you owe,
1:29.3	your net worth would be the same. Is it the same in your mind? I don't know. Everyone's wired a little
1:35.5	differently. I can't stand being in debt, but others can tolerate it a little more in certain
1:44.1	situations. But when it comes to the kind of debt, most people are talking about paying down, high interest debt, consumer debt, there's not a good bit of that debt. Nothing's good about that debt. You can't be like, oh yeah, I got a student loan, it was modest, and I got my higher education, and I'm employed. It's not that. You can't say, oh, I got a house. It's a modest mortgage. Now I've got a roof over my head.
2:04.1	We own a home. It's not that. Consumer debt is the nasty kind. By now, pay later is the nastiest of the
2:10.0	nasty kind. Anytime that you are going into debt for something that goes down in value or the value literally just
2:22.5	disappears the instant you swallow it, we have a problem.
2:28.9	High interest debt, obviously you want to pay that down more than low interest debt,
2:33.6	but the debt that
2:36.7	creeps in on you over time, that's the stuff that most people are like, I got to get rid of that.
	...

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