Setting priorities is vital for creating an effective personal budget and making progress toward your long-term financial goals. Addressing debt, like student loans, is always an important objective. Deciding how you will pay off your loan means taking your broader financial picture into account.
Student loans can add up to tens or even hundreds of thousands of dollars. While you should never neglect the repayment term of your federal or private student loans, you shouldn’t ignore your other financial responsibilities, either. Finding a balance between your student loan payments and other financial needs helps you move forward effectively.
Consider these other basic financial needs as you look to create a comprehensive and useful budget:
- Setting aside three to six months of basic expenses in an emergency fund, to serve as a general financial cushion for unpredictable needs.
- Saving for retirement, setting aside roughly 10-15% of your monthly income.
- Paying all of your bills in full every month and avoiding the accumulation of credit card debt.
- Ensuring you can purchase or regularly make payments on necessary items, ranging from a car to major appliances.
While not as foundational, you may have other financial goals to balance with your student loan debt. They include:
- Setting money aside for a down payment on a condo or home, which may lead to lower long-term costs for housing.
- Creating a rainy day fund or saving money for a vacation or other memorable and important experiences.
If paying off student loan debt is especially important to you, there’s no reason why you can’t talk to your loan servicers about additional payments and gear your budget toward this goal. Just be sure to keep your other responsibilities in mind as you do so.
Comerica Bank specializes in providing the banking tools, support and advisory services our customers need for strong financial management, like our Access Checking account. To learn more about balancing student loans and saving money, watch the video below.
