Debt might make you feel hopeless, but it's a common challenge that we can help you conquer. It's important to keep all payments in good standing, that means making at least minimum payments. We also suggest that you consider setting aside some money for an emergency and contributing to your retirement savings accounts before directing extra cash towards loan payments above the minimum.
If you have these things covered and can find a little extra money from spending less or earning more, you can focus on bringing down your debt.
So how can you get control? Consider these steps:
Figure out what debt you have
Rank your debt by interest rate
Pay down high interest debt first
Finally, consider investing
Got student loans?
There are tools and programs to help with student loans—public or private, big or small. Fidelity's Student Debt Tool can help you make smart decisions about your student debt. It can also help you decide if you should invest while paying off your loans.
Debt on FI/RE
Bridget used the tactics of FI/RE to clear her student debt, and that was just the start of her journey. She set up direct deposits to funnel money from her paycheck directly into a savings account she has targeted toward debt, as well as retirement savings and investment accounts—leaving herself a modest “stipend” to live off of.
"Freedom is one of the things I’m searching for in life."
Before starting any new business or activity to generate income, please consider discussing with a tax professional how this may affect your tax status or filing obligations.
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Fidelity does not provide legal or tax advice. The information herein is general in nature and should not be considered legal or tax advice. Consult an attorney or tax professional regarding your specific situation.