Shred Tip: When to Prioritize Debt Payoff vs. Investing
One of the most common questions we hear is: “Should I focus on paying off debt or start investing?” The answer depends on your current financial picture, and The Shred Method can help you find clarity.
Here are a few guidelines we recommend:
âś… Prioritize Debt Payoff When:
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More than half of your income is consumed by monthly debt payments.
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Your discretionary income is in a tight spot.
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More than half of your monthly payment on any debt is going toward interest instead of principal.
Once you’ve freed up cash flow and shifted the balance of your payments toward principal, your money will work harder for you elsewhere.
âś… Start Investing When:
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Your discretionary income is in a healthy place.
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The majority of your debts are now principal-heavy, meaning most of each payment is reducing the balance—not just covering interest.
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Your reports in the software show that the interest savings left on your debts are only in the low thousands. At this point, it often makes more sense to begin putting money into investments.
Remember—you don’t have to make this decision alone. Our coaches are here to walk through your numbers with you and help confirm when it’s the right time to shift gears.
Once you’re ready, we’ll help you launch into Phase 2 and Phase 3 of The Shred Method—building your Wealth Reserve and putting your money to work for long-term financial freedom.
📞 Reach out anytime if you’d like to schedule a call and review your numbers.
PS: Check out this video Adam did on the math behind the decision of investing vs paying off debt. Give it a thumbs up and share your thoughts in the comment section. Subscribe to our channel! We’re gonna be posting great videos like this one very often.
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