It’s hard to overstate the lifelong value of higher education, yet with today’s high cost of college tuition, books, housing and more, many students and their families find themselves dealing with the challenge of student loan debt. What’s more, when it’s time to pay off student loans, recent college grads often face questions about other kinds of debt (auto, credit card, first mortgage, etc.) on top of their student loans. Whatever you’re facing, however, there is one tactic you should consider as part of your overall strategy to reduce debt of every kind.

It might seem a bit counter-intuitive. If your student loan debt is the proverbial “fire in the kitchen,” shouldn’t you “put out the fire” by immediately making the largest payments you can afford to make, as often as you can make them? While paying down debt is important, you should consider it in the context of your whole financial strategy.

Because life is full of unexpected expenses, building up an emergency fund can actually keep you from accumulating more debt. Auto repairs, doctor visits, vet bills, home repairs, the list can go on and on. If you don’t have a plan for how to pay for these expenses, it’s simply too easy to use a credit card, which only becomes another burden to carry along with the student loan and other debt you’re already trying to pay off.

Consider making minimum payments toward your debt while you save a modest amount of money away from your other funds—perhaps in an Ally Online Savings Account or even in a No Penalty CD. That way, you can pay emergency expenses out of your “rainy day” fund and get back to plugging away at your student loan debt reduction plans.

Maintaining your emergency fund balance at a level that makes sense for you is just part of building financial agility into your personal finance plan. Consider using a service like, a free online service that helps you manage your finances, set goals and budgets and even find ways to keep more of your money.

When it comes to student loan debt, there are no shortcuts, but when you work toward building sound money management discipline for the long-term, you’re more likely to succeed in less time. And with some of the most competitive interest rates and convenient banking products available, Ally Bank helps your money work as hard as you do.

Learn more at or call live, 24/7 customer care at 877-247-ALLY (2559).

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