Savings vs paying off debt

[Account Closed]

Hello all.

I have ~$24k in car loans for which I had a plan to get paid off in a few months, while continuing to save money to begin investing in real estate... to date, we have accumulated close to $30k, kept in a “high-yield” savings account and earning 2% interest.

However, in recent months, we were hit with medical bills which we had to put on credit cards, adding another $16k in high-interest debt.

My initial thoughts are to use the $30k to knock down the debt to $10k as the much higher interest I pay on the debt means I’m losing money each month, and start again saving from scratch. I also figure that, by cutting some of the monthly debt payments, I should be able to use that money to pay off the $10k quicker and then accumulate savings faster than the previous time.

However, the general advice going around is to “pay yourself first” and not touch that money for any reason. So, I would like to ask for advice as to what might be the better way to accomplish both goals: paying off all debt and save enough money to go into real estate investing.

Thanks in advance for any advice received.

— Max.

[John Warren]

@Account Closed I personally do not believe it makes sense to pay off all debt all the time. For instance, I have a loan on my wife's car (2019 Odyssey) for .9%. Why would I pay this off as the Honda dealership is actually losing money based on inflation loaning money to me this cheaply? All I have to do is invest the equivalent amount of cash and make a return greater than .9%, and then I am making money on the arbitrage. 

The reality is that having everything "paid off" makes more sense later in life when time is not on your side, but if I were you I would be looking to invest in assets that allow you to create 50k in equity without scrimping and saving for months.