Should You Pay Back Debt Or Focus On Saving?

I’ll be making my last ever student loan payment in a few hours.

It’s been one of the hardest decisions I’ve had to make – focus on saving or paying off debt? I started off doing a bit of both but in the last few months, I changed my strategy and focused on paying off all debts and have used almost all my savings to do this.


Because my student loans are in US Dollars and I earn in South African Rands and in the last 9 months, the rand has depreciated significantly against the Dollar, making my debts even more expensive.

So in the end I had to make the choice of either saving or paying off debt.

I chose paying off debt, because I didn’t want to take on the exchange rate risk and I wanted to be rid of the anxiety that came with thinking about this risk.

What about retirement?

I haven’t touched my retirement savings, although I was very tempted to dip into those savings as well, but luckily I have a kickass financial adviser.

In an ideal world I would recommend saving a little bit for emergencies and retirement and paying off debt at the same time.

Watch the video below to see why I say that:

The alternative

The other alternative that I did consider when it came to paying off my student loans was to take my savings and invest that money and then use the initial capital and the return on investment to make a lump sum payment.

I know some people do pay off debt this way, but I found this to be a risky strategy because of the currency situation, coupled with the interest rate on the loan itself.

In addition to the risk factor was the anxiety and frustration it was bringing up for me and based on experience I know that frustration and anxiety have a negative impact on my financial decisions.

What would you do?

Pay back debt or focus on saving?

I would love to hear what your thoughts are on paying debt vs focusing on saving in the comments section below.