Rule 10 of 19 · Chapter II — Pay Yourself First
Kill high-interest debt first
Why this rule exists
Not all debt is equal, and high-interest debt is a fire. A balance in the twenties of percent grows faster than almost any investment can reliably earn, which means paying it off is one of the few guaranteed, tax-free returns you will ever find. Every dollar you throw at it earns that rate, risk-free. While it is burning, it undermines everything else you try to do. Saving into an account earning a few percent while a card charges twenty is like bailing a boat without plugging the hole. Put out the fire first.
In practice
List every debt with its interest rate. Keep making minimums on all of them, then aim every spare dollar at the highest rate until it is gone, and roll that payment onto the next, because the math favors this order. If you need the motivation of quick wins, clearing the smallest balance first is a fair trade for staying in the game. Avoid new high-interest balances while you dig out. Once the expensive debt is gone, redirect those same payments, now a habit, straight into saving.
When it doesn't apply
Low, fixed-rate debt, a reasonable mortgage or a subsidized student loan, need not be rushed; that money often does more good invested or building your cushion. And never throw your entire emergency fund at debt, or the next surprise puts you right back on the card.