INVESTING VS PAYING OFF DEBT

At this point were assuming you already are doing a monthly budget. 
That's because without a budget you don't really know how much money you have anyway. 
Either to invest or pay off debt.

Every personal financial story is different. 
But no matter how different there are some very basic guidelines most would be wise to consider.
Notice we use words like "basic" and "most" for a reason.
That's because only you (or we, if your married or in a relationship) know best what your current situation is and will likely look in like in the near future.
You're not in this alone, but only you have the final say.

The first thing you want to do, apart from tuning-up your monthly budget, is DON'T ADD MORE DEBT.

While all these factors can be confusing, there are some very helpful guidelines to simplify the process.

* First and foremost begin contributing to your companies 401k or other Retirement plan. Contribute at least up to the point of your employers math. 
More if at all possible. 
The combined FIFTY PERCENT MATCH on contributions along with PRE-TAXED benefit should be the first move you make.

* Payoff any high interest debts first. 
We'll use eight percent as the baseline defining what is high interest.
This will usually include short term loans, credit card debt, car notes over eight percent, etc.

* If your combined debts are especially large (more than a year of your annual take home pay). You have some more difficult decisions to make.
 Since you can't live on nothing you're going to have to greatly increase your income if you want to pay off all your debt quickly.
 It's temporary, and it's doable.

* Conversely if your combined debt isn't as high as the last example your decision is easy.
 Pay it off now! 
As close today as humanly possible.
One year max.
 Yes still max out your 401k if possible. 
Cut your spending to the barest minimum, every hour of overtime, working part-time, mowing yards on the side, donating plasma, whatever it takes. 
This isn't meant to sound harsh but we are talking about YOUR debts.
 So pay them off once and for all.
 And don't replace them with more debt.

* As much as possible avoid the "middle ground" approach. 
This is the time to make substantial progress in targeted directions.
Making minimum payments on all your debts and still not contributing enough to your 401k to get your company match will get you nowhere fast.

 If ever.  Of course it's understood that there are limitations. 
Likely as not you can't pay every debt off today and still maximize your long term investments. 
You still want to be as specific as possible and make real progress, not just occasional incremental gains.

* Maybe you've noticed we haven't mentioned home mortgages yet.
Theres a reason. 
Mortgages are a different animal all together.
Of course you do want to pay your mortgage as fast as possible. 
But fast as possible doesn't necessarily mean as fast as what makes the most sense.
Paying all your debts might take a full year.
 Paying off your mortgage will almost certainly take several years.
Do you really want to put off any long term invest (except of course your 401k) for YEARS. Only you can answer that.
While the middle is never the best direction it might be the only path. A reasonable response might be to have a target date to pay your mortgage.
For example if you have twenty-four years left on your mortgage aim to cut that amount in half.
Assuming of course that leaves you enough every month for some serious long term investing.

* One last thing.
 Trying to figure out what money should go where can be the trickiest to navigate. 
Take your time on this one and revisit this matter regularly. 
Don't change directions everytime you feel you aren't making the progress you should. 
But don't be scared of making changes either, if you think it makes sense to do so.