Are you drowning in debt but also feeling the pressure to start saving? You're not alone. So many people struggle with this question every day: Should I pay off my debt first, or start saving for the future?
The truth is, money is simple—when you know where to focus. But if you’re trying to do it all at once, you’ll end up spinning your wheels and getting nowhere fast. It’s like trying to run a race with weights on your ankles. Debt is holding you back from reaching your financial goals, while saving without a plan is like throwing money into a bucket with holes in it.
In this post, we’re going to clear up the confusion and show you exactly where to start. Let’s talk about how to get rid of that weight around your ankles, build a solid foundation, and move toward the financial freedom you deserve!
1. Establish a Starter Emergency Fund
Before we dive into paying off debt, let’s talk about setting up a basic emergency fund. I’m not talking about thousands of dollars here; just a small safety net to catch you if life throws a curveball. In fact, all you need is $1,000 to get started. That’s right, just a thousand bucks! This isn’t about building long-term savings yet—it’s simply about having enough cash set aside to keep you from going even deeper into debt if an unexpected expense pops up.
Think of this starter fund as your insurance policy against life’s surprises. Because here’s the thing: life will throw you surprises. Your car breaks down, the kids get sick, or a pipe bursts in your home. These things happen, and without a small emergency fund, you’d end up putting those expenses right back on a credit card or taking out another loan. And that, my friend, just digs you deeper into the debt hole.
So make it a goal to save up that $1,000 emergency fund as quickly as possible. Sell something, pick up extra shifts, or cut back on eating out for a few weeks. Get intense. Once you have this little cushion in place, you’ll have some breathing room to start tackling your debt without the fear of every little setback derailing your progress.
2. Attack Debt with Gazelle Intensity
Now that you’ve got your $1,000 starter emergency fund in place, it’s time to get serious about tackling that debt. And I mean serious. This isn’t the time for half-measures or excuses. To get out of debt, you’ve got to go after it with what I like to call gazelle intensity—like a gazelle running from a cheetah! Debt is that cheetah chasing you down, and if you don’t get moving, it’s going to eat up your financial future.
Here’s how you attack it: use the debt snowball method. Start by listing all your debts from smallest to largest, regardless of the interest rate. Then, pay minimum payments on everything except the smallest debt. On that one, throw every extra dollar you can find at it until it’s gone. Why start with the smallest debt? Because paying off that first debt quickly gives you a psychological win. You’ll feel a rush of motivation and confidence that you can actually do this. And let me tell you, momentum is everything on this journey.
Once that smallest debt is paid off, take the amount you were paying on it and add it to the minimum payment of the next smallest debt. Keep rolling payments from each cleared debt into the next one until you’ve tackled them all. This strategy builds up speed like a snowball rolling down a hill, and with each debt you knock out, you’ll gain more cash flow and confidence to keep going. And here’s the best part: as those debts disappear, so does that monthly drag on your income. By staying laser-focused, you’ll be completely debt-free before you know it.
3. Once Debt-Free, Boost Your Savings
Congratulations—you did it! You’re now debt-free and feeling that incredible weight lifted off your shoulders. Now that your income is no longer being chewed up by debt payments, it’s time to take things to the next level and really build a rock-solid financial foundation. This is where we focus on building up a fully funded emergency fund.
Think of this fund as your safety net that’s going to protect you against life’s bigger surprises. Aim to save three to six months’ worth of expenses. Why that much? Because now that you’re debt-free, you’re working to make sure you never go back. A solid emergency fund will keep you covered if you lose a job, face unexpected medical bills, or have a major home repair. With that kind of cushion, you’ll be able to handle anything life throws your way—without touching a credit card or taking out a loan.
Take the intensity you used to pay off debt and put it straight into savings. Use the same budgeting strategies and determination to hit this goal as quickly as possible. Once you’ve saved up three to six months of expenses, you’re ready for the next steps in your financial journey. At this point, you’re not just surviving anymore. You’re prepared, you’re strong, and you’re about to start building real wealth!
4. Beyond the Basics: Invest and Build Wealth
With debt behind you and a fully stocked emergency fund in place, you’re ready to shift your focus from just getting by to actually building wealth. This is where the real excitement begins, and it’s where all that hard work starts to pay off. Now you can put your money to work for you by investing for your future, setting yourself up for financial peace like never before.
The first step here is to start investing 15% of your income into retirement. I’m talking about 401(k)s and Roth IRAs. By consistently investing that 15%, you’ll be building a nest egg that grows and compounds over time, putting you on the path to financial freedom. This isn’t about getting rich quick—it’s about using proven principles to build long-term wealth that will last you and your family for generations.
Once you’re investing for retirement, you can start thinking about other ways to build wealth. You might save for your kids’ college, pay off your home early, or even start giving generously to causes you care about. Financial freedom is about having options, and once you’re free of debt and have a strong financial foundation, the sky is the limit.
Remember, you didn’t work this hard just to stay comfortable—you’re building a legacy. With no debt dragging you down and a solid savings and investment plan in place, you’re creating wealth that can change your family tree. This is the reward for all that gazelle intensity and hard work. So keep it up, stay focused, and keep moving forward. You’ve got this!
Choose Financial Freedom, One Step at a Time
Now, you have the roadmap. You know the steps to take: build a small emergency fund, crush your debt with intensity, build a fully funded emergency fund, and start investing to build wealth for your future. Each step builds on the last, and each one is a crucial part of getting you where you want to go. Financial peace doesn’t happen overnight, but every little step forward brings you closer to the freedom you deserve.
When you’re working to build a solid financial foundation, it’s easy to feel overwhelmed or wonder if it’s even worth it. But let me tell you, it is worth it. Imagine the freedom of waking up every day without the weight of debt dragging you down, the confidence that comes from having savings in the bank, and the joy of knowing you’re building a better future for yourself and your family. That’s what all this is about.
So make a decision today. Choose to take control of your money instead of letting it control you. Follow these steps one at a time, and remember—you’re not just working on your finances. You’re working on a life of freedom, security, and peace. Stay focused, stay committed, and before long, you’ll be living the life you’ve always dreamed of. You can do this!
Frequently Asked Questions (FAQs)
1. Can I save and pay off debt at the same time?
In a perfect world, it might seem smart to do both. But if you’re serious about getting out of debt, focus is key. Start with a small emergency fund of $1,000, then throw everything else at your debt. Once you’re debt-free, you can go all-in on saving and investing. It’s about intensity and focus—doing one thing really well instead of trying to juggle too much.
2. What if I have high-interest debt? Should I prioritize that first?
I get it—high-interest debt feels like it’s burning a hole in your finances. But here’s the deal: by using the debt snowball method (paying off the smallest debts first), you build momentum that keeps you motivated. That motivation is powerful, and it keeps you going even when paying off debt feels tough. Stick with the snowball method and watch your debt disappear, one payment at a time.
3. How much should I save once I’m debt-free?
Once you’re debt-free, it’s time to build a fully funded emergency fund. Aim for three to six months’ worth of expenses. This might feel like a lot, but it’s worth it! With that kind of cushion, you’ll be prepared for whatever life throws your way without slipping back into debt.
4. When should I start investing?
Once you’re debt-free (everything except your mortgage) and have your emergency fund in place, start investing 15% of your income for retirement. With debt gone and savings in the bank, you’re ready to build wealth. Invest in retirement accounts like a 401(k) or Roth IRA and let your money grow over time.
5. Why not just keep a big emergency fund instead of paying off debt?
Debt keeps you from truly owning your income. It’s like carrying a ball and chain around your finances! Getting rid of debt means every dollar you earn goes toward your future—not toward paying back yesterday’s mistakes. Start with $1,000 for emergencies, focus on killing your debt, and then build a bigger emergency fund. It’s all about creating freedom.
6. How do I stay motivated on this journey?
Getting out of debt and building wealth isn’t easy, but it’s worth every bit of effort. Keep your “why” in mind. What does financial freedom look like to you? Maybe it’s being able to help your kids through college, retire with dignity, or give generously to causes you believe in. Whatever your reason, keep that vision front and center. And remember, it’s about progress, not perfection—just keep moving forward, one step at a time!