We’ve made it known on Financial Highway on how important it is to start early when investing. Of course, that is easier said then done, especially when you just graduated from college with student loan debt. Getting your feet wet in the real world, finding a job and spending your new found money seems to be consistent on every graduates radar. So what first? Paying off student loans or saving for retirement?

Now, this almost seems like a what comes first, the chicken or the egg type of question. Everyone will have their own opinion on the matter, but in the end there may be some that are really uninformed of what to do and what options are available to them. There is a process to determine what is best for your given situation.  Here is how I look at it.

Step 1. Make sure you have your spending in check. That is the first pitfall when it comes to paying off debt. You have all this money and the first thing on your mind is to buy every widget that seems to hit the market. Documenting monthly expenses and creating a budget are essential.

Step 2. Look around for ways to cut your monthly student loans payments down by consolidating your loans. Sadly, it is becoming more difficult to find places to consolidate loans as lenders are tightening their lending standards. Long gone are the days of sub 2% interest rates (that is what ended up with in 2004). However, it is better to try and whittle down your minimum monthly payments to help aid you to pay off other debt and save for your retirement. In no way am I advocating that you stick with minimum payments the entire length of the loan. That would be mistake unless your students loans remain the lowest interest rate of your active debt.

Step 3. Find out what your employers offers in terms of retirement plans, like a 401k. Most employers offer some sort of retirement plan and many of those plans will match employer contributions. Can you say free money? Having a percentage of your income automatically deducted from your paychecks will eliminate the urge to spend it before you can deposit it in your own self directed account. Out of sight out of mind, right?

Pass step 1? Congratulations, you have money and eliminated wasteful spending. This is the most crucial step.

Pass step 2? You’ve lowered your student loan payments. You freed up money to allocate towards retirement while paying your student debt. Good job!

Pass step 3? You can cross of saving for retirement off your list. Your automatic payments can be adjusted as you see fit, but make sure you get your full match.

So what is the answer to the proposed question? The answer is YES and YES you can!

Stupidly Yours,




StupidCents was founded by Matt in 2009. His thoughts are shaped by his family and career and seasoned by his endless motivation to succeed personally, professionally, and financially.