When it came to paying off debt or saving for retirement, small business owner Brigitte decided it was more important to get rid of her debt.

“I didn’t feel as if I was able to invest in anything until I first paid off my debt,” the 32-year-old explains.

An owner of a production company in Los Angeles, she first saved three months personal overhead into an emergency savings account. After that, she transferred her high-interest credit card debt to a card with zero percent annual interest, and focused on paying down her debt. Once that was entirely squared away, Brigitte started to invest into a Roth IRA.

Paying off high-interest debt is stressful. The weight of the debt is tough both financially and emotionally.

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Katie Brewer, CFP® and president of the Gen X and Gen Y financial planning firm Your Richest Life Planning, talks a lot of people through their debt. And she puts it plainly, “The high-interest debt often comes from a budget leak, so the budget leak needs to be fixed before someone can truly get rid of the debt and move on to financial wellness.” 

Simple, right?

As it turns out, most people aren’t very good at estimating how much time it takes to do things like saving for retirement or paying down debt.

So putting all of your money towards paying down your debt actually adds stress to your life. (People also aren’t very good at estimating how long it will take to get rid of debt — especially since it can be a moving target.)

Given all of this, while it may make more financial sense to focus on paying off any high-interest debt, it can feel disheartening to pay off the debt lords while not having anything to save for the future.

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Original illustration from hyperboleandahalf.com

The good news is you don’t need to do this alone, don’t turn your back on your trusty friend 401(k).

Especially if your company is offering to feed your 401(k) through a company match.

When you’re struggling to stay on top of bills and get a handle on your debt situation, it’s tough to think of long-term goals such as retirement.

While it may feel like a “this or that” situation, Brewer explains that it is possible to do both at the same time – especially if there is an employer match on the 401(k): “If there is a retirement match through an employer, it could make sense to get the match while paying down the high-interest debt.”

You don’t necessarily need to choose between one or the other.

Take 30-year-old Elizabeth, who was facing $50k in student loans and a $9k credit card balance. She decided to contribute 3% of her paycheck into her workplace’s 401(k) plan.

“If my company didn’t have a 401(k) plan I would not be saving for retirement at this point,” Elizabeth explains. “It would be much harder for me to take dollars out of my bank account and put them somewhere else, especially if it’s not toward my existing debt.”

Try out these options to put your 401(k) to work as you pay down debt:

If your 401(k) comes with a match:

  1. ** Pay the minimum on high-interest debt. ****
    **A general rule of thumb is to focus on paying off any debt with an interest rate that’s higher than 5%, which includes credit cards, student loans, and auto loans.
  2. Get the company match.Look closely at what it takes to get the company match. Sometimes it’s set up in a way where you need to contribute 5% to get a 3% match, or you’ll get a 3% match if you contribute 6%. If you have any questions, talk to the HR department.
  3. ** If there’s any money left over, pay down the high-interest debt. ****
    **If you have multiple forms of high-interest debt, one approach is to tackle the one with the highest interest. If you can swing making two payments during a pay cycle, schedule it so the first payment hits before the end of your billing cycle, and the second before the due date.

If there is no 401(k) match:

  1. ** Pay the minimum on high-interest debt. **
  2. ****Put 3% toward your 401(k). Three percent is a good amount to contribute for starters; most of the time you won’t notice. As it’s a pre-tax contribution, meaning the money put into your 401(k) is deducted from your paycheck before federal taxes are withheld. Another thing you can do is to schedule it so you put in another 1% every year into your 401(k) account.
  3. ** If there’s any money left over, pay down the high-interest debt.**

And here’s the really, really good news. You have a huge community of people rallying behind you, sharing how they got out of debt themselves, and giving you a ton of free resources (spreadsheets, calculators, inspirational quotes, Pinterest boards) that helped them along the way.

Here are a few bloggers to help you get started: