📉 Debt-Free Living: The One Rule That Can Make It Work

Living debt-free might seem like a reach or stretch that is always just out of reach, but it’s more doable than you think. A lot of people struggle with paying off debt because they don’t have a clear, sustainable plan.

The key to getting out of debt and staying debt-free lies in one simple rule: the “pay yourself first” method.

a road sign that reads Debt Free with an arrow to the left

The One Rule That Can Make It Work

This rule isn’t about self-indulgence or splurging. Instead, it’s a smart financial habit that helps make sure you’re setting aside money for savings and debt repayment before you spend on anything else.

Let’s break down how this rule works and how you can start using it to achieve a debt-free life.

1. The “Pay Yourself First” Rule Explained

The basic idea behind paying yourself first is to prioritize savings and debt repayment before paying bills or buying things you may not really need.

When you do this, you make sure that you’re always putting money toward paying off your debt or building your savings, rather than spending everything and then trying to save what’s left.

How to Get Started:

Set up an automatic transfer that puts a part of your income into a savings or debt repayment account as soon as you get paid.
Make this transfer a non-negotiable part of your budget, so you can focus on your financial goals without getting distracted by day-to-day expenses.

2. How It Helps You Stay Focused on Your Goals

The “pay yourself first” method helps you stay focused on what matters most—whether it’s building an emergency fund, paying off high-interest debt, or saving for the future.

By setting aside money right away, you avoid the temptation to spend it on things that don’t align with your financial goals.

Fix It:

Once your automatic savings or debt repayment is set up, the money for your bills and other expenses will be easier to manage. You’ve already “paid yourself,” so everything else becomes more manageable.

a heart made with $100 bills laying on top of a calendar with Debt Free! written in blue marker

3. How to Determine How Much to Set Aside

It’s important to determine how much of your income you can realistically set aside each month. You don’t need to commit to huge amounts—start small if necessary and gradually increase your savings or debt repayment as you become more comfortable.

Fix It:

Start by setting aside 10% of your income, then adjust it as your financial situation allows. Even small amounts add up over time and help you stay on track.

4. Eliminate the Stress of Last-Minute Scrambling

By adopting the pay yourself first method, you eliminate the stress of scrambling to make ends meet after paying bills. Since you’ve already allocated money for savings and debt repayment, the rest of your budget is easier to manage.

Fix It:

Once your savings or debt payments are set aside, use the rest of your income for necessary expenses. If you’re not able to cover all your bills with what’s left, adjust your spending habits to align with your priorities.