Prepared for an Emergency?
It is often times referred to as a rainy day fund. If you don’t have one, it is a good time to start building up a stockpile of savings in the event of something unforeseen happening. Many financial advisors recommend having at least 3-6 months of expenses available in cash in order to cover you in the event of lost wages. This is one example of a place where your money will be well “spent” instead of paying off your debt. I had to make sure that mine was healthy amount before I left my job.
Is Your Nest Egg Empty?
If you aren’t at a bare minimum contributing to your RRSPs or 401k fund, your money may be better used towards retirement than that of debt payments. Additionally, there are multiple other types of retirement accounts in addition to a RRSP/401k that you can be contributing to. Many of the tax breaks as well as the time value of money will end up making your money grow at a quicker rate than the interest on your debt.
College Fund, Goals, etc.
There are multiple other things that can be intrinsically more valuable to you than paying off your debt. An example of such a thing is a college fund for your children. Although this is in no way earning you a monetary return on your investment, it is most likely extremely important to you to have your children get a proper higher education. You may have other goals that are important to you that require you to place them in a higher category than paying off your debt immediately.
Although these are a few examples of places where your money may be better spent, the fact of the matter is that there are many other viable options for either investing or spending your money that may be far more important to you than paying off your debt immediately. Some people want to buy and own a house, while others are content renting all their lives. If home ownership is for you, doing your own research using resources like Just Buy to Let is a great idea to make sure you are making the right decision. This is not to say that you should go out and splurge on a new TV or other trivial pursuit. At the end of the day everyone’s financial situations are different and taking the time to evaluate your individual situation is important in determining where your hard earned money is best spent.