Balancing paying off debt and saving can be tricky. Here’s a step-by-step guide.

BY STAFF WRITER, FIDELITY – 06/28/2019

Key takeaways

• Save for an emergency—consider saving enough to cover 3 to 6 months of expenses.
• Consider a health savings account if you’re eligible, and contribute to your workplace retirement plan.
• Pay down debts with the highest interest rate first.

Student loans, credit card balances, car loans, and mortgages—oh, my. You probably have a variety of debt—most people do. So which should you focus on paying off first? And how can you save at the same time?

Of course, make sure to pay at least the minimum required—and on time—to keep all loans in good status. After all, defaulting on credit cards, car loans, student debt, or home mortgages can destroy your credit rating, and risk bankruptcy.

Before you tackle debt, pay yourself first. Make sure you:

• Use tax-advantaged accounts like a flexible spending account or a health savings account if you have a high deductible health plan. That lets you pay for medical bills using pre-tax money.
• Save enough in a workplace retirement savings plan to get the match from your employer—that’s “free money.”
• Set aside some cash for emergencies.

Assuming you are meeting those primary obligations, here’s a link to a guide to help you pay off debt while saving for emergencies and long-term goals like retirement. It may seem counterintuitive, but before you tackle debt, make sure you have some “just in case” money and save for retirement.

— Read on www.fidelity.com/mymoney/ditch-debt-and-start-saving