Credit Smart Solutions

Is It Better to Save or Pay Off Debt First? (Australia 2025 Guide) If you're juggling savings goals and credit card bills in 2025, you’re not alone. Many Australians face the classic financial question: should you save money or pay off debt first? Start with an Emergency Fund Before tackling debt aggressively, aim to build a small emergency fund — typically $1,000 to $2,000. This prevents you from going deeper into debt when unexpected costs arise. Compare Interest Rates vs. Savings Rates Credit card interest: 17%–21% Mortgage rates: 6%–8% Savings accounts: 4%–5% in 2025 (introductory rates) Conclusion? You're often better off paying down high-interest debt before building long-term savings. When Saving First Makes Sense You have no emergency fund at all Your debts have low interest (e.g., HECS/HELP loans) Your income is unstable — buffer first! When Paying Debt First Makes Sense You're paying over 15% interest (credit cards, payday...

Jess & Tom’s Saving Challenge: $20K in 12 Months for a Wedding Meet Jess and Tom — both 29, living together in Hobart. With rising costs and a modest combined income of $110K, they were determined to save $20,000 for their dream wedding without taking on debt. The result? They hit their goal in just 12 months, and even had a honeymoon fund leftover. 📆 Setting a Deadline and a Goal They circled a date — 12 months from now — and reverse engineered their savings. That meant: $1,667/month combined $834/person/month About $28/day each 💳 Step 1: Audit, Cut, Automate Used Frollo to audit all spending Eliminated Uber Eats, alcohol, and new clothing Set up direct deposit to a “Wedding Fund” account with Up Bank 🍳 Step 2: The ‘No-Spend Weekend’ Rule Two weekends per month, they did no paid outings . Instead: Cooked together with friends Visited free events and beaches Used public library date nights (true story!) They saved $250–$300/month ...