payoff vs savings

Hi!
Welcome to the forums!
Actually both are important. If you don't pay off your debts, then your credit score will be hurt. Creditors/collections can even sue you for the non-payment of dues. On the other hand, if you don't save, then you'll not be able to bear the emergency expenses. I feel that the best thing will be to pay off debts and save some money simultaneously.

[SIZE=3]This is basically Dave Ramsey???s Seven Baby Steps but I slightly modified. I think you should save a minimum $1,000 emergency fund prior to working on debt. Personally I try to keep $3,000 - $5,000 but my account varies and sometimes only has $1,000. I also have a car loan and one credit card with no balance. Dave disagrees with having those. [/SIZE]

• Make sure you are current on all necessities i.e. mortgage, utilities, car payment.
  
• Save a minimum $1,000 emergency fund.
  
• pay off all debt smallest to largest except the house
  
• Save 3-6 months living expenses
  
• invest in retirement
  
• college funds
  
• pay of the home
  
• build wealth
  
• give to charity
  

The only thing I disagree with on the order is giving to charity. You can't outgive God. Give him what is due Him and you'll find your 90% goes a lot further. BIG key to our financial turnaround.