If you are one of the many who have credit card and other debts you may be thinking which should I pay off first. It is always best to think of your debt in terms of percentages. Which debt has the highest interest rate? You should seek to eliminate the higher rate first and then tackle the others debts accordingly.

When you have finally paid off the debt, do not carelessly spend and dig yourself in to the same hole. You worked hard to get where you are so keep going. Continue to build upon good habits and maybe invest some of this money into a business, retirement, or investment fund. Save it for a rainy day or for a time of future financial difficulty. This practice builds financial security. What if you were to lose your job unexpectedly? It is said that you should have at least 3-6 months of funds to coverall your expenses. This is typically the time needed to secure another job.

If you happen to come across sudden money and are debating whether to invest or not, just ask yourself one question. Can I get a higher return on the investment as compared to the debt interest rate? If the answer is no, then you should pay down your debts. If the investment rate is higher then you need to consider the risk involved. If you are unsure as to what the risk level is, then go with the safe bet and pay off your debts.