Paying yourself first while in debt

Pay for the past, pay for the future

What should people with debt do?

What is the amount you decide to Pay Yourself First? Split that in half. 50% of that should go into your “Pay Yourself First” accounts. The rest of the 50% should go to pay off your debt.

The reason is, we can make progress on the future while we are getting ourselves out of debt. The rationale here is as much emotional as it is financial. By doing both of these things at the same time, we will feel our progress. We will see money being saved and debt being reduced.

If we were to direct all of our available cash flow to debt reduction, with the idea that we wouldn’t begin to save until all our debt is paid off, it might literally be years before we could begin saving for the future. This is too negative - so negative, in fact, that many people who follow this path get discouraged, give up early, and never get to the saving part.

Bury the past and jump to the future.