The importance of saving and household debts for economic growth is not overlooked. In the last decade, the flow of household indebtedness has increased in Pakistan. One objective of the study is to identify the trend of household indebtedness and saving in Pakistan and to understand the allocation of debt by indebted household. The study collects data from HIES surveys (2005-2006, 2007-2008, 2011-2012, 2015-2016 and 2018-19) and access to finance survey (2010). The findings suggest that the consumption is the key determinant of household borrowings and informal markets are main the sources of borrowing and saving in Pakistan. The other objective of the study is to confirm the degree of interdependence between financial assets and household debt by using the cross sectional data (HIES 2018-2019). The study used SUR technique which result shows the interdependence between household financial assets and liabilities and there is significant and negative relationship between them. It is particularly important to understand how household liabilities affect their financial decisions as the volume of debt increased. This study gives direction to investigate the interdependence of different components of liabilities and financial assets. Supervisor:- Dr. Hafsa Hina