Split Investment with Paying Down Debt

By | August 13, 2013

It is possible to make a commitment to invest whilst at the same time paying down debt. This is a positive step, investing for the future and at the same time being committed to reducing any debt that you have accumulated, up to this point in time.

To do this successfully you will need to have written a budget and worked out a surplus amount that you can use for paying down debt and investments. It is important to pay down debt because it will give your more money to spend or invest each month, and long term you will pay less interest on your debts, potentially shortening the term. Investing money will mean that you will have a nest egg that you can nurture over time and help to grow and develop whilst it is working hard for you.

Paying down debt

To do this successfully you need to order your debt with the highest interest rate at the top, this is the one that you work with first. Pay off the minimum balance and then use your surplus, which you will split between this and the investment, and pay off some of the balance that you owe and this will reduce the total amount owed.


You need to find somewhere that your money is going to work hard for you and you need to think of this as a long term account. Searching for the best place for your money isn’t going to be easy. You need to find a place that will offer you some great return for your money. If you do not have any other savings accounts then you need to think about access. Ideally, you do not want to touch this money but if it means using your savings or taking out a loan then you would be better to use your savings. This could mean that you will need to find a place where if you did need access then you would be able to use the money.

If you have an emergency account you could think about long term investments, where you can’t touch them for a minimum of five years. These types of account should give you the better rate of interest. Some of these accounts want a minimum amount invested, if this is the case, save the money that you want to use for investing until you have a sizable amount which you can then invest.

So, you can see from split investment with paying down debt, you will have reduced your amount of overall debt that you owe, but you will have started to invest some of your money into working harder and more productive for you. This will be the start of creating a new understanding with your money, no longer will you let it slip through your fingers, and you will start to think about what it can do for you, how you can put your money to work in a positive way.

2 thoughts on “Split Investment with Paying Down Debt

  1. Derek

    I like this way of thinking quite a bit. I think it’s a bad idea to focus on just one or the other.

    The best thing is to focus and develop good habits to work on both areas.

    1. Sharon Rowe Post author

      Thank you for your comment I agree with looking at both aspects too.


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