Should I Build My Savings or Get Rid of Debt?

According to YouGov, one of the top resolutions for 2026 is saving more money. While Jesse has issues with the concept of "saving" money as he has discussed in previous podcasts, the intention is still clear -- people want to get to a more stable financial position, which (for most) means more cash in the bank and less debt. Jesse also points out that consumer debt continues to hit all time highs, which leads to his approach to the question: should I build my savings or pay off debt? Jesse urges folks to consider, why do they feel the need to reach for consumer debt in the first place? Reaching for debt regularly, especially pernicious forms of debt like credit cards and buy now, pay later programs, indicates that you aren't aware and in alignment with your true expenses -- the larger and less frequent expenses that you know will happen, but aren't regular monthly bills like rent or utilities. Auto maintenance is a classic example of true expenses -- you know you'll need oil changes, transmission fluid changes, new tires, etc. eventually, but it's not a regular monthly expense. The trap many people fall into is throwing everything they have into debt payments, only to have a true expense pop up and no cash to pay for it. So they bring out the credit card and fall back into the same cycle that got them into debt in the first place. If you turn your attention away from paying off debt for a bit and instead focus on setting money aside for these true expenses, like tires, then you can reduce your need to rely on consumer debt to cover these. Just setting aside $50 or $100 a month toward these expenses can make you so much more financially resilient, that you no longer need debt and can now begin to pay off debt from a place of stability. All of a sudden, you are planning and thinking about money like a YNABer! Watch The Jesse Mecham Show on YouTube: Got a question for Jesse? Send him an email: askjesse@ynab.com Sign up for a free 34-day trial of YNAB at Follow YNAB on social media: Facebook: @ynabofficial Instagram: @ynab.official Twitter/X: @ynab Tik Tok: @ynabofficial

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Should I Build My Savings or Get Rid of Debt? is an episode from You Need A Budget (YNAB) by YNAB.

This episode is 09:54 long.

This episode was published on Jan 15, 2026.

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