Walking a tightrope

Paying down debt while saving for your future

If there’s ever been a time you’ve demonstrated your ability to multitask, it’s been this year. Like the demands you’ve had both at home and at work, the process of paying down debt while saving for the future can be a balancing act. 

Start by decreasing debt  

Look for ways to eliminate some of your debt, including tuition reimbursement programs, the Public Service Loan Forgiveness program or by using the following strategies: 
  1. Create a budget. A budget can help you carefully track both expenses and income. It may also help you spot opportunities for additional saving. 
  2. Know what you owe. Review your latest credit card, loan and bank statements to see how much debt you have and when it’s due. Also consider requesting a credit report at
  3. Pay more than the minimum. Paying off high-cost debt takes a long time if you just pay the minimum—plus, you’ll end up paying more because of accumulating interest charges. 
  4. Ask your credit card company for a lower rate. If you’re carrying a high balance, a lower rate could save you hundreds or even thousands of dollars in interest. If you have a history of timely payments and strong credit, they may agree to honor your request. 
  5. Dip into savings temporarily. This may sound counterintuitive, but if you’re paying a higher rate of interest on your debt than you’re earning on savings, it may make sense to use your savings to reduce the debt. If at all possible, however, avoid taking a loan from your retirement plan
  6. Get help. There are certified nonprofit credit counseling firms that offer free or low-cost guidance on reducing debt. A trained credit counselor can help develop a personalized plan.  

Prioritize your financial goals  

First, make a list of the financial goals you’d like to accomplish in the short term and in the long term. Do you want to save for an advanced degree? Contribute more to your retirement plan? Put money aside for a well-deserved break from your hectic schedule? 
Next, establish a dedicated savings or investment account for each goal. You can make automatic contributions to each account from your paycheck or checking account. If you don’t already have an emergency fund, consider setting one up to save enough money to cover three to six months of basic necessities. 

Take advantage of benefits offered through your organization 

Many healthcare employers offer benefits that can help you save, including: 
  • Automatic payroll deductions that help you plan and invest for retirement
  • Matching contributions—“free money” the employer adds to your retirement plan account if you also contribute
  • Discounts on insurance, banking, education or recreation

Don’t go it alone 

There are resources available to help you find the right balance between debt reduction and increased savings. To get started, call 800-732-8353 to schedule a meeting virtually or by phone with a TIAA financial consultant.  
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This material is for informational or educational purposes only and does not constitute fiduciary investment advice under ERISA, a securities recommendation under all securities laws, or an insurance product recommendation under state insurance laws or regulations. This material does not take into account any specific objectives or circumstances of any particular investor, or suggest any specific course of action. Investment decisions should be made based on the investor’s own objectives and circumstances. 

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