How I’m Paying Off $10,000 in Debt While Saving for My Future
Debt payoff and saving at the same time? Sounds impossible, right? That’s what I used to think too. But as someone who’s been on a journey to financial independence, I’ve realized that paying off debt and saving for the future don’t have to be mutually exclusive. They can (and should) happen at the same time if you want to create real financial stability.
Breaking free from the debt cycle is a challenge many women face. According to StepChange, 64% of women sought debt advice in 2023, up from 60% in 2021, with the rising cost of living being a significant factor. Additionally, Yahoo Finance reports that 60% of women carry credit card debt, ranging from a few hundred to several thousand dollars. Understanding these statistics underscores the importance of breaking the debt cycle and establishing sustainable financial habits.
In this post, I’m breaking down the exact strategies I’m using to pay off $10,000 in debt while building my savings. I’ll share how I budget, the methods I use to attack debt, and the mindset shifts that have made all the difference.
My Debt Payoff & Savings Plan at a Glance
Here’s my three-step approach to balancing debt payoff and savings:
Prioritize High-Interest Debt First - I focus on paying off credit card debt aggressively while making minimum payments on lower-interest debt.
Automate Savings for Non-Negotiables - I treat my emergency fund and future savings as essential bills.
Find Ways to Increase Cash Flow - Cutting expenses is great, but making more money is even better.
Now, let’s break each of these down in detail.
1. Prioritizing High-Interest Debt (Without Ignoring Savings)
Not all debt is created equal. High-interest debt, like credit cards, can snowball out of control if you don’t tackle it fast. That’s why my main focus has been paying off my highest-interest balances first while still contributing to savings.
The Strategy: The Avalanche Method
I’m using the debt avalanche method, which means I pay off the highest-interest debt first while making minimum payments on the rest. This saves me the most money on interest over time.
Step 1: List out all debts, interest rates, and minimum payments.
Step 2: Pay the minimums on all but the highest-interest debt.
Step 3: Throw any extra cash at the debt with the highest interest.
💡 Pro Tip: If you’re dealing with high-interest debt, look into a 0% APR balance transfer credit card or negotiating a lower interest rate. This can help you save money while you aggressively pay it down.
2. Automating Savings for My Future Self
It might seem counterintuitive to save money when you’re in debt, but here’s the thing: Life doesn’t stop when you’re paying off debt. Emergencies happen, opportunities arise, and having a financial cushion prevents you from falling back into the debt cycle.
How I Make Savings a Non-Negotiable:
Emergency Fund First: I keep at least $2,000 in an emergency fund before throwing extra money at debt.
Automate Savings: I set up an automatic transfer to my high-yield savings account every paycheck.
Use Sinking Funds: I save separately for expected expenses (car maintenance, travel, medical bills) to avoid using credit cards.
👉 Tools I Use: Ally Bank for high-yield savings, YNAB (You Need a Budget) to track my goals.
3. Increasing My Cash Flow (So I Can Do Both Faster)
Cutting expenses is one part of the equation, but I realized that increasing income is the real game-changer. Here’s what I’m doing to make more money while keeping my sanity:
Side Hustles & Passive Income Ideas I Use:
Freelance UX Design Work: Since I’m a UX designer, I take on occasional freelance projects to make extra cash.
Selling Digital Art on Etsy: I revived my Etsy shop for passive income.
Content Creation & Monetization: Growing my blog and YouTube for future revenue.
Cutting Expenses (Without Feeling Miserable):
Meal Prepping & Making Coffee at Home: This saves me $200+ a month.
No-Spend Challenges: I do these once a quarter to reset my budget.
Canceling Unused Subscriptions: Goodbye, sneaky charges!
The Mindset Shift That Made the Biggest Difference
One of the hardest things about balancing debt payoff and savings is feeling like you’re not making progress fast enough. But progress is progress, no matter how small.
A few things that helped shift my mindset: According to Fidelity, nearly 50% of women identify overspending on non-essential items as their biggest financial challenge, making mindset shifts crucial to breaking the debt cycle.
✅ Tracking progress visually (I use a debt tracker + savings thermometer) ✅ Celebrating small wins (Paid off a credit card? Treat yourself to a $5 latte, guilt-free) ✅ Focusing on the long game (This isn’t a sprint, it’s a marathon)
My Progress So Far & Next Steps
Right now, I’ve already paid off $4,500 in debt and built my emergency fund to $3,000. My next focus is putting an extra $500/month toward debt while growing my savings to $10,000 before making bigger investment moves.
My next posts will dive deeper into:
The exact budget breakdown I use to manage debt & savings
How I built an emergency fund from scratch while in debt
Side hustles that actually work (and don’t burn you out)
If you’re in a similar situation, remember: You don’t have to choose between paying off debt and saving for your future. You can do both.
What strategies have helped you stay motivated while tackling debt? Let me know in the comments or DM me on Instagram @whatshesaves! 🚀
