Should You Invest or Pay Off Your Debt First?

Mandy C.
6 min readJun 27, 2022

How to Make the Ideal Pick

Imagine you’re just done with college, and all the excitement of graduating has finally died down.

You’re left with two things: your certificate and a considerable amount of student debt.

Fast forward a few years down the line, and you have a stable job.

You also took loans to buy a house and your first car and have a credit card. All this is debt.

Or if you are like past Mandy and are constantly buying things to make yourself feel good or pretty enough, you may be left with a good amount of consumer debt. (cry cry)

(In case you can’t tell yet, I am pretty high maintenance.)

Now, if you’re lucky enough to pay all your bills and have some money to spare, the big question is, what do you do with it?

Do you work to clear your debt or head over to the stock or crypto market and start investing?

In this article, I will talk about one of the biggest financial debates (and one that I have a strong opinion on), that is, whether you should pay off your debt first vs. invest that money.

Let’s Begin with Paying Off Debt First

Photo by Emil Kalibradov on Unsplash

Now, there are several arguments for this approach.

The biggest argument for clearing your debt first is that if you make debt a habit or something normal, you will continue to incur more debt and financial stress.

More so if you have debt that carries a significantly high-interest rate.

While mortgage and student debt carry reasonable interest rates anywhere between 2 and 6%, personal loans and credit card debt have much higher interests and may go as high as 20%.

Unfortunately, few, if any, traditional investments (I am talking about stocks here), that can match that rate.

Mandy C.

Licensed Corporate Finance Adviser, Spiritual Wealth Coach, Podcast Host