As the stock market continues its roller coaster ride, many individuals can’t help but ask whether it is best to invest while there are some good stocks available or are they better off to pay down debts, namely credit cards?

There is no set answer, as individuals need to realistically look at their own situations to see which financial decision is more prudent for their case.

Issues to Confront

Individuals need to determine the larger number, the return on investment or the interest they are currently paying for their credit cards. For those people who are paying greater interest than they could earn, they are advised to pay down their debt first.

When it comes to paying down debts, some financial experts will advise individuals to place their debts in order, from those charging the largest interest rates to charging the least.

On the flip side, others will advise placing them from smallest to biggest, paying off the smallest one first and making at least minimum payments on the others. Some view this as not only get a debt paid off, but giving a consumer something good to feel about when the debt is removed.

Know the Tax Implications

Another factor for individuals to consider is what tax implications will befall them.

Individuals should look at whether the interest on their investment is taxable, along with if the interest on their debt is tax-deductible. When investing in items like traditional IRAs and 401 (k) plans, you can decrease your taxable income, so those investments can assist you.

Individuals should also take into consideration that investing is best done when finding returns that significantly top the interest on their debts. Over time, individuals will be able to pay off high-interest obligations, while likely tracking down save investments that offer a better return on their money as opposed to paying more on their lower-rate debts.

Lastly, while credit card and other debts are something you can’t run away from, remember that your future financial picture is even more important today, given the questions about how much Social Security may await you when you retire down the road.

If you’re able to eliminate high-interest consumer debt, begin saving as much as possible. The best place to kick things off is a 401(k). The next best choice is an IRA.

Along with putting money into a retirement account, individuals will require cash that’s readily available in an emergency in order to rely on credit cards.

Individuals should put aside enough funds to hold them over for three months if their paycheck suddenly ceased. If they have less-than-steady income, think about putting aside six months of income, potentially through a high-yield savings account or money market fund monthly basis until reaching a desired amount.

As noted earlier, each situation will warrant its own analysis, but paying down debts and investing in one’s future are both win-win scenarios.

Dave Thomas is an expert writer on items like business security systems and is based in San Diego, California. He writes extensively for an online resource that provides expert advice on surveillance system purchasing decisions for small business owners and entrepreneurs at Resource Nation.