Saving is important, but it's also important to pay down interest-bearing debt. In general, you want to pay down as much debt as possible, but don't forget that every payment you make cannot be taken back. So, if you pay down half your mortgage then lose your job, it doesn't matter how much you paid off. What matters is you make the next payment. You need to make sure you have enough savings to cover anything that might come up, or all that debt paydown will go to waste if you get foreclosed on for non-payment.