Prioritizing Debt Elimination While Still Saving
Being a young professional knee-deep in student loan debt, it’s hard for me to save and think about retirement. I’d rather use my disposable income to fund my next trip. However, in my efforts to be a ‘responsible’ adult I decided to create a system that prioritizes my debt and allows me to start saving for my future.
First, I used the expenses sheet to record my bills. These bills include rent, car note, student loan payments, etc. Any funds leftover are considered to be discretionary funds that can be used for salon appointments, spa visits and entertainment.
Next, I automated payments like my like my car note, student loan and credit card to come out of my checking account each month. This step has played a major role in creating a system to pay down my debt. Additionally, my employer allows the option to have a designated amount of my salary go to my savings account while depositing the balance to my checking account. Setting this up has forced me to save money and now I don’t even miss the money that automatically goes to my savings.
In addition to my savings, I have a 401(K) plan and a 403(B). Although many of us are far from retirement, it’s important to take advantage of employer match programs. It’s free money, so don’t leave it on the table. For instance, if you employer matches dollar for dollar up to 5% then make sure your contributions are set at 5%.
When it comes to tackling your student loan debt, it’s important that you make your payments as scheduled. But, it’s also important that you have a budget in place to help you stay on track. Don’t get so caught up in your debt that you don’t save for your future. Stay motivated. We’ll tackle our student loan debt, one payment at a time.
Please download the free budgeting worksheets on the site to get started!