Find a Dept Solution with a simple re-payment plan.

When parceling out your money, it makes sense to pay off debt with the highest interest rate—which in your case is probably credit-card debt. Paying off a balance on which you’re being charged, say, i6% interest is the equivalent of earning a i6% rate of return on your money.

On the other hand, interest rates on government-subsidized student loans are lower than rates you’d pay on credit-card debt or car loans. And you can cut your rate further by arranging for your loan to be paid automatically each month. Student loans also represent an investment in your future that will pay off in increased earnings over time. So once you’ve negotiated the best terms you can, put the payments on autopilot but don’t pay ahead on the loans. One exception: high-rate student loans from private lenders. If that’s your most expensive debt, tackle it first, assuming there’s no prepayment penalty.

Now let’s consider the psychology of saving. Even if you’re trying to pay off debt, save at least a small amount, divided between a high-interest-rate online savings account to cover emergencies and an employer-sponsored retirement account or a Roth IRA.

Nothing beats the security of having money in the bank. Once you establish the discipline of saving, it will stick with you for the rest of your life. And thanks to the magic of compounding, those small amounts will grow into large amounts of cash.

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