If you're carrying unsecured debt, particularly unsecured credit card debt, you need to get rid of it. It is extremely difficult to get a better return on your money than getting out of debt. The national average credit card interest rate is about 14.77%
Though stocks and mutual funds are capable of creating high returns they are also capable of experiencing significant loses to the principal investment. So, let's say these investments could give a positive return in double digits or a negative return in the double digits. What about more secure savings vehicles that don't risk your principal? Well, the better high yield savings accounts and money market accounts pay about 1.10% interest right now.
Now we have something we can compare in a hypothetical scenario.
Total Unsecured Debt: $10,000
Debt APR 14.77% (average)
Minimum Monthly Payment = monthly interest plus 1%
Disposable income after all debts and expenses are covered: $200
Savings Annual Interest = 1.1%
Note: This scenario assumes you already have a modest emergency fund. If you do not have an emergency fund, your first priority would be to put the $200 into an emergency fund until you have about $1500 or so set aside.
If you put the extra $200 into paying the unsecured credit card debt for a year your total debt would be at the end of the year would be $6146.01 rather than the $8853.81 it would be if you made only only minimum payments. That difference of $2707.80 includes $174.76 in interest you did not have to pay due to the faster reduction of the principal balance on the debt.
If you put the extra $200 you have in your budget into a savings account at the above interest rate, you would have $2400 saved and would earn just $12.14 in interest.