Why it matters
Paying off cards with zero savings just reloads the cards at the first flat tire; saving heavily while a card compounds at 24% burns money every month. The sequence exists to stop both failure modes at once.
The steps
Never skip minimums
Late fees and credit damage outrun every other consideration. Minimums are non-negotiable rent on your past.
Bank the starter cushion first
$500-$1,000 in a separate account. This is what makes the payoff plan durable — emergencies stop interrupting it.
Check the employer match
If your job matches 401(k)-style contributions, contributing enough to capture it is commonly prioritized even alongside debt — an immediate 100% (or 50%) return is hard to beat. Circumstances vary; the match is the reason this step exists.
Attack high-interest debt with everything extra
Anything at roughly 10%+ — credit cards, payday remnants, high-rate personal loans. Every $100 paid at 24% saves $24 a year, guaranteed, tax-free.
Then build the full emergency fund, then invest
Low-rate debt (many mortgages, some student loans) can coexist with saving and investing. That balance is personal — our Roadmap lays out the common order.
Worked example: $250/month available, $3,000 card at 22%
Common mistakes
- All-in on the card with $0 saved — one car repair restarts the debt and the discouragement.
- Building six months of savings while a 24% card compounds. The cushion has a size; finish it and move on.
- Counting the retirement match as optional. Unclaimed match is a pay cut.
- Treating 3% student loans like 24% cards. Rate determines urgency.
What to do next
Set your starter-cushion autopay tonight, then run the Debt Payoff calculator to point everything after it at the right target.