Should I Pay Off Debt or Save First?
Financial FAQ Friday: Here's how to finally stop guessing
The question has probably lived rent-free in your head at some point:
“I’ve got debt…but I know I should be saving too.
What do I actually do first?”
Let’s make this simple.
🧠 Step 1: Cover Your “Oh Crap” Fund
Before you throw every dollar at debt, you need one thing first:
A small emergency fund — just $500 to $1,500
Why?
Because without it, life will keep pulling you back into debt.
Car trouble? Medical bill?
You’ll just swipe the card again.
Think of it like building a moat around your castle.
Without that moat, your progress is always one fire away from collapsing.
💳 Step 2: Focus on High-Interest Debt
Once your “moat” is in place, get aggressive with debt.
Any debt over 7% interest is financially on fire.
Think credit cards, personal loans, and some car loans.
Make minimum payments on everything except the highest-interest balance — and attack that one with everything you’ve got.
This is called the debt avalanche method and it saves you the most money over time.
💰 Step 3: Once You’re Out of The Fire, Start Building
After you’ve crushed high-interest debt, it’s time to build:
Emergency fund to 3-6 months of expenses
Start investing
Save for big goals (house, travel, etc.)
Now you’re not just surviving, you’re compounding.
✅ Quick Recap
Start with a small safety net ($500-$1,500)
Kill high-interest debt (credit cards = top priority)
Start saving and building wealth
No more guessing.
Just a clear order of operations.
💬 Still not sure what to do next?
Tap the ❤️ or drop a comment with your situation and I’ll help break it down.