Debt and Savings – you can have both!


Paying off debt and building wealth simultaneously is easy, said no one ever.

We all have some form of debt, whether it’s consumer debt like credit cards or secured debt like a mortgage. Your outlook or perception of your debt is almost as important as the dollar amount you owe. You should see all your debt as temporary, and the full payment of each account, from your department store credit card to your mortgage, as a financial goal.

“Part of our mission is to help you reach good financial health,” said Painesville Credit Union CEO Lori Guzzi. “We offer financial counseling session to help you get started. Just give us a call for an appointment!”

How do you pay off debt and build savings at the same time? It’s possible, we promise. Here are a few ways to make it happen.

  • Make a list with two columns. One column is your “good” debt, or debt that will eventually end up as an asset. This includes mortgages, student loans, and business loans. The second column is your “bad” debt. This is debt that is caused by overspending, or an asset that loses value over time (like a car). Good or bad, debt has to be paid back in full. Making these lists will help you visually assess your good debt to bad debt ratio.
  • Set goals. More specifically, set Specific, Measurable, Attainable, Relevant, and Timely (SMART) goals. The key is to figure out what you can do, what you should do, and how you can get it done. Examples of great, SMART goals are: a. Save a $1,000 emergency fund in four months. b. Choose two debts to pay off in two months, or four debts to pay off in four months. c. Open a savings account with a specific goal in mind, like the down payment on a house.
  • Now that you have a savings plan, you need a spending plan. Jot down the approximate amount of your monthly bills: cell phone, car payment, rent or mortgage, individual utilities, minimum payments on credit cards, estimated cost of food, etc. Add all that up and subtract it from your total monthly paychecks. That leftover spending money needs to be prioritized. What bills can be eliminated or reduced? How can you save on spending to add to savings?
  • It can be hard to imagine having an emergency fund when you are trying to throw every penny toward debt reduction. Remember that most people end up with debt because they don’t have enough funds to cover an immediate need. Start small, with a $200 goal. Then aim for $500, then $1,000. Your emergency fund should eventually cover about three months’ living expenses – enough to cover a period of unemployment or illness.
  • Keep track of your progress! There is something very satisfying about meeting financial goals big and small. Watch your emergency fund balance go up while you watch your debt total go down and pat yourself on the back!

We’re always here to help you reach your financial goals! Call us at Painesville Credit Union at 440-352-8974 to set up a financial counseling session, open a savings account, or finance your dream car or house!

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Making Life a Little Better is a blog by Painesville Community Credit Union. We're here to help you borrow and save money, plan for your family's future, and find the best chili recipe in Ohio (and maybe the world). Learn more about Painesville Community Credit Union here:


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