[GMScud]

Just what TMC said. Chances are your debt is costing you more in interest payments than your savings is accruing, so I'd say get that debt paid down first.

What kind of debt does she have? If we're talking past due credit cards/collections accounts, you absolutely want to wipe those out immediately to minimize the impact on your credit score. If you're just talking student loans, a car payment, or credit cards that aren't past due, just keep paying it down on time (pay more than the monthly minimum whenever possible) and hang on to your savings in case of emergencies.