Everyday Money Habits · Worksheet

Which debt burns first.

The usual advice says clear all your debt before you invest a dollar. The honest version has one exception and one ranking rule: capture the employer match first, then attack whatever charges you the most. Rate, not balance size, is what makes a debt urgent.

Beginner

Name

Date

Audience: For anyone deciding which debt to attack first
Time: About 20 minutes
Materials: A list of your debts with balances and rates · a pen

Objective

List your debts by rate, put the employer match first, and name the one debt your next dollar attacks.

Use this when

You have a few debts and want to know — honestly — which one to throw extra money at first.

1 · List your debts by rate

Write down every debt with its balance and its interest rate (APR). The rate is the number that matters here — a small balance at 27% is a bigger fire than a big one at 4%.

DebtBalanceRate

2 · Put them in order

There’s one order that holds for almost everyone:

The employer match, first — before any debt. A 50–100% return the day it posts, guaranteed. It’s the one step that shouldn’t move based on your debt. (The one exception: if grabbing the match would push you into new card debt, pause it until that cycle is broken, then restart at the match level.)
Attack the fires: anything above about 7%. Store cards, credit cards, personal loans. Wiping out a 27% balance is identical, in dollars, to earning 27% — guaranteed, tax-free.
Leave the low-rate debts on schedule. A 0% promo or a 4–6% car loan isn’t a fire; pay the minimum and send your extra dollar to the fires instead.

Among the fires, two orders both work: snowball pays the smallest balance first, for the momentum of a quick win; avalanche pays the highest rate first, for the lowest total interest. Pick one and finish it — most people who fail at debt payoff fail because they keep switching, not because they picked wrong.

My highest-rate fire — the first extra dollar after the matchthe top rate from your list above

The method I’ll pick and finishsnowball (smallest balance) or avalanche (highest rate)

If you’re in a crisis, this isn’t the tool

This is a planning sheet, not a rescue. If you’re behind on payments, facing repossession, or weighing bankruptcy, talk to a non-profit credit counselor accredited by the National Foundation for Credit Counseling (nfcc.org) — that’s outside what a worksheet can solve, and it’s the right kind of help.

3 · One move, this week

The outcome is a single line: my next dollar goes to ___. Do that one thing — don’t try to fix three at once; the order is a sequence, not a set of parallel projects.

My next dollar goes tothe match, or the top fire once the match is captured

The one move I’ll makeraise a percent · write down my rates · add a payment

The date I’ll do it bya date turns a plan into a payment

4 · Reflection

Which debt were you about to attack for the wrong reason — biggest, loudest, or scariest rather than highest-rate?

What "done with the fires" would feel like:

Based on the Guide to paying off debt.