No matter how badly you want to get out of debt, not every extra penny you make should go towards paying off debt. Regardless of how much in hock you are to your credit card companies and student lenders, you need to have some of your income dedicated to savings in some form.

Believe it or note, there are serious risks that come from being too devoted to paying off debt and not being in the habit of saving money on a regular basis.

Reasons to save money while paying off debt

Needing money for retirement
While you may feel like you’re going to work until the day you die, the odds are that at some point you will have to exit the workforce and rely on your lifetime of retained earnings to live a comfortable life. Too many people find themselves in their sixties and seventies with little investments and fully dependent on Social Security and pension programs to live. You do not want to put the quality of your Golden Years in the hands of bureaucrats. You have to save something for retirement from the day you start working until the day you stop, no matter how much debt you have.

Needing money for a rainy day
Too often, people take out bad debt when their backs are against the wall and they have no other choice. The payday loan business wouldn’t exist if everyone had an emergency fund. But when the gas tank is empty and there’s no food on the table, people make bad financial moves. Having an emergency funds means that you won’t have to take on new credit when you weren’t expecting to.

Missing out on tax benefits
One of the pillars of personal finance is not paying any more in taxes than you absolutely have to. The rich do it, and if you ever want to be a 1%er it’s a good idea to copy those who have already made it. If you contribute to an IRA or 401(k) retirement account, you have the opportunity to avoid paying income taxes on either the money you contribute or the income from those savings.

If your employer also matches a portion of your 401(k) contributions, then by not participating you are literally passing up free money.

Building bad habits
Spending all of your paycheck is always a bad habit. Even if every extra cent is going to paying off debt. What happens when you are debt-free? Too often, people who get out of the habit of saving money for a rainy day never start up again when they pay off their bills. If you don’t have a savings account, aren’t following the stock market and aren’t contributing to a retirement account then it becomes too easy to take the extra money you get from paying down your bills and use it for fun, frivolous spending. If you’re in the habit of saving, there’s a good chance that you’ll use at least part of the extra money to save more.