Paying Off Debt but Still Want to Save? Here's How to Manage Both

SINGAPORE, May 18, 2026 (Newswire.com) - Want to rebuild your savings while carrying an existing debt? It can be overwhelming, but it is possible. The common belief is that one must eliminate all debt before saving again, but this could not be further from reality. Both goals can be managed together, even with monthly bills, Equated Monthly Instalments (EMIs) and everyday expenses competing for your income.

A balanced approach to savings can reduce financial stress, help to stay prepared for emergencies and move steadily towards long-term stability. Some short-term options to help paying off debt include a Balance Transfer, Personal Loan or a credit line. Choosing the suitable Balance Transfer option available can help lower interest costs and make repayment more manageable.

Wondering how? Read along to find out.

Get a clear picture of your current finances

Before creating an aggressive savings plan or an unrealistic debt payment plan that will soon drain you, it is important to understand where your money is going. As a first step, list all your outstanding debts, including credit cards, personal loans or education loans, along with their respective interest rates and required minimum payments. While doing this, also consider your monthly income and essential expenses to understand the flexibility you have.

Budget for both goals

Rebuilding your savings starts with setting a well-structured budget. Many people often allocate every bit of extra money towards debt repayment, which is why they fail to rebuild their savings. Allocate specific portions to both savings and debt reduction, striking a balance that ensures you do not feel financially insecure while you work towards freedom from debt. Over time, your budget can be adjusted as debts reduce and your financial confidence grows.

Start with an emergency fund

An emergency fund protects you from unexpected expenses that could push you further into debt. This fund helps cover medical emergencies, urgent travel or sudden job changes/loss, without relying on credit cards or loans. Building this fund steadily, no matter the amount, is more important than trying to save a large sum all at once.

Reduce debt while protecting your savings

If you want to stay consistent with repayments without sacrificing your savings, you must choose the right strategy, which balances interest payment, motivation and cash flow. The right approach depends on whether you want to minimise interest or maintain motivation while saving. The debt avalanche method focuses on the former, while the snowball method helps with the latter.

Debt avalanche method

Under this method, the focus is on paying off debts with the highest interest first, while continuing to make minimum payments on others. This reduces the total interest paid over time, whereby you regain control. This repayment strategy reduces the interest burden and frees up money that can be later redirected towards savings.

Debt snowball method

The snowball method focuses on clearing smaller debts first, focusing on quick wins that result in continued motivation. With each debt cleared, the available amount can be split between savings and the next payment goal.

Automate savings

The temptation to skip saving when expenses rise can be strong; hence, automating your savings is important. For instance, setting up a mandate for automatic transfer of funds to your savings account right after your salary is credited ensures consistency. This helps you maintain steady and growing savings while also staying committed to debt repayment.

Cut expenses without feeling restricted

Reducing expenses does not require extreme cutbacks. Identify areas where you can make small adjustments that will lead to significant savings. This includes checking for unused subscriptions, planning meals to limit dine-out expenses, and reviewing bills wherever possible. The freed-up money can later be allocated to savings or debt payments.

Rebuilding your savings while paying off existing debt is a long-term game of patience, planning and consistency. Start by understanding your finances and then identifying a financial strategy that works best for you. Saving and debt repayment are not competing goals, they can work together to create a secure financial future.

Disclaimer: This content is published by iQuanti Singapore Pte Ltd, an external marketer engaged and compensated by UOB Ltd.

Contact Information:

Name: Sonakshi Murze
Email: [email protected]
Job Title: Manager

SOURCE: iQuanti

Source: iQuanti