We’re all big fans of having money in savings but what should you do about those UGLY credit card balances? Here’s some ways to help you decide.

Money is only a number.

Alright, so unless you have wads and wads of cash lying in a safe then most of your money is only a digital value. You can go online with that number and buy goods and services but until you do that (or convert into cold-hard cash BABY) your money is simply a number that you can’t do anything with.

With advancements of companies like Venmo and Grubhub, it’s easier than ever to spend more money than necessary on food, drinks and other useless garbage. I’m not saying food is useless. What I am saying is that a hard-boiled egg and a breakfast burrito serve the same purpose but have severe price differences. Services like Apple Pay make it easier to spend more money than necessary. Haven’t you wondered why casinos use chips and not real money? It’s the same idea – money is easy to spend when it’s not cash.

Credit Card Interest is MORE than a number. It’s slavery.

Before credit cards in the 1960’s, how in the hell did people pay for things? Think about if you had to use cash for ALL of your purchases? I would be more motivated to make money and that is where the problem lies. If credit cards did not exist than everyone would have to fight harder every single day to not only survive but also to enjoy life and the purchases that go along with that good-life. NO more of this “buy now and pay it off over time” approach.

Do you know the interest rate of the credit cards in your name? They typically range from 15%-25% depending on your credit score and other factors.

Here’s where the slavery piece comes in. If you spend $1,200 on a credit card and plan to pay $100 a month to pay it off in 12 months, you will be surprised when it takes longer. Why? Because the credit card company takes that $1,200 balance and starts charging interest on the balance. So paying off your credit cards is no longer a casual “pay it off when I want to” strategy. You literally become a slave to your debt. Then real life hits as well. That same credit card you used for the $1,200 purchase has to be used to pay the car mechanic $300 and then you’re right back to where you started.

THE BANKS DO NOT CARE ABOUT YOU. There is no mercy with credit cards. You are handed a credit card but they might as well put you in handcuffs.

So, what is the right thing to do?

Look, the right thing to do is to make butt loads of money so that you can pay off your credit cards every month and never pay interest, while also saving and investing money. Go out and buy a Ferrari and beach-front property. Since the average american makes less than $60,000 and the average household savings amount is less than $4,000 I will go ahead and assume that most of you reading this have actual, real-life decisions to make. Should I pay off my credit cards or put money in savings.

I have  $0-$1,000 savings and more than $1,000 on credit cards

The answer is easy on this. Save like your life depends on it. Start acting like credit cards don’t exist and find a way to live like someone in the 1950’s. Save every single penny and put a plan in place to save FAST while slowly paying off the credit card debt. At this point, you need security above all else.

I have $1,000-$5,000 savings and more than $5,000 on credit cards

This might be the toughest category for me to answer. What’s your work situation? How stable is your income? Do you have a family? I would ask someone close to you for advice on this. As a general rule of thumb the ANSWER is most likely to pay off those credit cards. Here’s why. How many unexpected situations do you expect (ha!) to arise this year where you’ll need a few thousand dollars in CASH? Maybe a security deposit if you’re moving soon. Perhaps paying for expenses if you lose a job? That might be it. You have a little bit of savings to fall back on so I would pay off the credit cards.

I have more than $10,000 savings and more than $5,000 in credit card debt

Are you comfortable with a $5,000 safety net for your savings? If you are, I would pay off the credit cards and do everything in your power to create a system where you pay off your credit cards every month, before your interest is charged.

Let me show you the easiest way to make $6,100 with zero risk. Let’s use the example above of $10,000 in savings and $5,000 in credit cards. If this were you, the minimum payment on the credit cards would be $50 per month. If you use $5,000 of your savings to pay off your credit cards you now have + $50 of monthly cash flow to use. Now what?

Now! Setup an automatic savings transfer every month to go from you checking account to savings account at $50. Set it to be the same day you get paid so you don’t “feel” it at all. I promise, you will hardly notice.

If you do this for 10 years you will have saved $6,100 (not factoring and investing or interest earned, just simple numbers). At 10 years you will have $11,100 dollars in savings and zero credit card debt (fireworks, commence!).

Look, we all have to make tough financial decisions. My wife and I recently decided to pay off $13,000 of debt. We had the money in our savings and I really (like, really really) wanted to hang onto it. Money makes me feel secure. For some reason, seeing $13,000 on a screen made me feel good inside. Like all my problems went away and would never come back. We finally decided to pay off the debt and I can tell you, I feel free! We have more money every month to invest or save and I feel way more optimistic about our financial future.

This is my main point. If you are feeling pessimistic towards your financial future. Change it now. Free yourself from debt and obligations. You will feel empowered and will change the direction of your future. Only you can do this.