Trying to dig yourself out from underneath a growing pile of high-interest debt can often feel like you’re working hard to defeat something that will never truly end. Once you shovel out a nicely sized hole, a high interest rate fills it right back in, adding a little extra on the top.
Add trying to save money toward your future goals, and you have what seems like an impossible task to achieve. However, it’s a real challenge many people are facing — and one that is possible to overcome.
Whether it’s student loans, credit cards or personal loans, paying down debt without sacrificing your long-term financial goals requires a smart, strategic approach.
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Here, financial industry experts from Kiplinger Advisor Collective offer tips for how to best navigate this all-too-common obstacle, as well as how to build momentum, reduce financial stress and make meaningful progress without putting your future on pause.
Boost your income
“One key tip for paying down high-interest debt while saving is to boost your income beyond the interest payments. Use skills or side hustles to generate extra cash, directing it to debt first and then savings. This works because exceeding the interest rate accelerates debt reduction, freeing up funds faster for future goals without sacrificing savings momentum.” — Dr. Clemen Chiang, Spiking
Try the ‘debt snowball’ method
“Use a debt repayment strategy like the debt snowball method: Pay minimums on all debts, but throw extra cash at the smallest balance first. Once that balance is paid off, roll that amount into the next debt. Meanwhile, contribute enough to get a 401(k) match and build a small emergency fund. This keeps you motivated, eliminates high-interest debt and ensures you’re still growing wealth!” — Bob Chitrathorn, Wealth Planning By Bob Chitrathorn of Simplified Wealth Management
Lower your interest rates
“One powerful strategy is to reduce your interest rates. Refinancing a mortgage from 7% to 5% or transferring credit card debt to a lower-rate card saves money instantly and accelerates how fast you attack the principal. It’s not just about paying — it’s about paying smart. Lower rates create a margin to invest and build for your future while still knocking out debt.” — Justin Donald, Lifestyle Investor
Follow the 50/30/20 rule
“Implement the 50/30/20 rule: Allocate 50% of your income to needs, 30% to wants and 20% to debt repayment and savings. If possible, direct financial windfalls (for example, bonuses and tax refunds) toward high-interest debt while maintaining steady retirement contributions. This balances debt reduction with future financial security, preventing lost investment growth.” — Greg Welborn, First Financial Consulting
Ensure you’re paying down your actual balance
“Use a balance transfer credit card to avoid paying interest for up to 21 months. This way, your entire monthly payment goes toward reducing your actual balance, and nothing is wasted on interest fees, so you pay debt down faster. Compare balance transfer cards to find the option with the longest no-interest term that meets your needs and credit rating.” — Andrea Woroch, Woroch Media Inc. / Andrea Woroch
Leverage the ‘avalanche’ method and automation
“Use the debt avalanche method by listing your debts from the highest to lowest interest rate and then attacking the most expensive one with every extra dollar you can spare while making minimum payments on the rest. At the same time, automate putting a small, consistent amount into a savings or investment account. This way, you’re not just reacting to financial pressure but also taking proactive steps toward the future.” — Zain Jaffer, Zain Ventures
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The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.