4 steps to tackle student debt and save for other goals

Step 1: Know your interest rates

Start by comparing the interest rates on your student loan, credit card purchases and any other debt you have. Then prioritize paying down the debt that has the highest interest rate, while making sure that you still make the minimum payments on the others. Paying off your highest interest debt first, like personal credit cards, is the best way to lower your monthly interest payments. This can free up more of your money to pay down the principal amount faster and help you get that debt off your plate for good.

Step 2: Uncover extra cash with a budget

A budget gives you a clear picture of where your money is going every month and can help you spot opportunities to save more. For example, are there monthly subscriptions or apps you forgot about or don’t use regularly? It may seem insignificant, but these small costs can add up quickly. Getting in the habit of budgeting will help you make day-to-day money decisions and will serve you well throughout your life. Just remember to revisit your budget on a regular basis as your life and your financial needs change. Ready to get started? Check out our budget calculator. That will give you a detailed breakdown of your monthly cash flow.

Step 3: Create a safety net

Be prepared for life’s ups and downs by setting up an emergency fund. A good rule is to save enough to cover 3 to 6 months of living expenses. It can be a challenge to do this while paying down debt, but emergency funds are for just that — emergencies. If something significant happens, like your car needs repairing, or you have an unexpected school expense, you’ll be glad you have it.

Step 4: Set goals to guide your decisions

As you put money aside for your future goals, it’s important to think about which type of saving or investment account is the best fit for what you’re trying to accomplish. Options like a high interest savings account, TFSA and RRSP each have their own unique advantages depending on your situation. If you’re saving for a backpacking trip next summer, your saving and investment strategy will be different than if you’re planning to purchase a home in 5 years. That’s why having a clear idea of what your goals are and how soon you’ll need access to your money can help you choose the best place to put your savings while you work towards your target.

Student life has some unique financial challenges and that’s where expert advice can make a big difference. Meet with a CIBC advisor virtually or in person today to talk about your goals.