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Jordan is 39 years old, and despite not having finished college, he recently started a job earning $75,000 per year.
But he also carries a heavy weight. He’s $59,000 in debt, with no savings and no assets. He finally has some momentum with his salary and is burdened by poor financial decisions from his past.
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For most of Jordan’s adult life, money management wasn’t a priority. He was financially irresponsible throughout his 20s. But he finally decided to get his act together and take his finances seriously. He’s even started budgeting.
The big question he has is what should come first: becoming debt-free or building long-term wealth?
Debt rundown
Student loans from his unfinished degree make up about $20,000 of Jordan’s overall debt. The rest, about $40,000, is high-interest credit card debt. To put this in perspective, the average credit card debt per borrower for Americans was $6,473 in Q3 of 2025, according to TransUnion (1).
He’s run the numbers: If he is aggressive, he should be able to pay off nearly all of his credit card debt by around mid-2027 if he puts $2,000 per month or more toward it. By extending that runway, he could be entirely debt-free the following year.
But remember, Jordan doesn’t have any savings. His employer offers a sponsored 401(k) plan with a 5% match, but he can only start contributing next year.
So, what’s his best course of action? Here are some options to consider.
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Establishing a small cushion
One thing Jordan probably doesn’t want to do is fall further into debt. That’s where an emergency fund comes in. He could start with as little as $1,000 and grow it over time. Experts typically recommend saving between three and six months’ worth of expenses, if possible.
Building up enough funds to cover your costs in case of losing your job or another crisis is crucial for financial health, but it’s also critical that you don’t just let that money sit in an account where it’s losing value by not earning interest.
Your emergency fund should be accessible at all times, but it should also be making money for you.
Consider stashing your fund in a high-yield checking and savings account with SoFi. You could earn almost nine times the national checking rate with no minimum balance.
SoFi can offer up to a 4.30% APY on your balance, and doesn’t charge account fees while providing some overdraft coverage. You can also get your paycheck two days early, which could also be useful for staying on top of debt payments, provided you’ve set up auto-deposit. SoFi also lets you bank with confidence, since they provide up to $3 million in additional FDIC insurance through their partner banks.
And the best part? Depending on how much you load up your account with, you could get a $300 sign-up bonus to get your stash of emergency cash off on the right foot.
Note that, ideally, an emergency fund is used to absorb a sudden financial cost that could put you into debt.
In Jordan’s case, building out a fund could conflict with paying down his debt immediately, but it depends on when and how he plans to make payments — not to mention how much he can afford to save. Either way, generating interest through a high-yield account can help mitigate some of the interest accrued on debt.
Getting that 401(k) match
Whether Jordan decides to focus on paying down his debt or start building his nest egg, one thing he should absolutely consider doing is participating in his employer’s 401(k) match program once he’s eligible.
Not only would contributing to a 401(k) put money toward his retirement, but any matching funds he receives from his employer is essentially free money. Matching programs can be a great way to build a nest egg.
While Jordan has started budgeting, finding extra room in his monthly spending for both saving and tackling his debt might seem like a challenge. The best way to tackle this is to track expenses, so you can see where every dollar is going and evaluate how you use your money.
If managing a budget feels overwhelming to you, apps like Rocket Money can simplify the process.
Rocket Money tracks and categorizes your expenses, providing a clear view of your cash, credit, and investments in one place. It can even uncover forgotten subscriptions, helping you cut unnecessary costs and save potentially hundreds annually.
For a small fee, the app can also negotiate lower rates on your monthly bills, making it a valuable tool for keeping your finances on track and finding room for contributing to savings each month.
While Jordan is running the numbers on his budget, this could be a good opportunity to look at other monthly expenses. One of the big ones, especially for someone possibly driving to a new job, is car insurance.
That’s where services like OfficialCarInsurance.com can come into play.
All you have to do is enter some basic information, such as the make and model of your car, location and driving history, and you’ll be matched with top providers in your area within minutes. This includes well-known names such as Progressive, GEICO, State Farm, Allstate and more.
Based on these factors, you could find rates as low as $29 per month. Any money saved from shopping around for insurance could then be used to pay down existing debts, invest in an emergency fund or be set aside for 401(k) contributions.
Focus on debt or savings?
Should Jordan prioritize paying off his debt or saving for retirement?
Part of the problem with saving while paying down debt is that any interest accumulated on the debt would eat into any savings. This is why some experts recommend focusing on paying down high-interest debt.
Jordan may want to put his efforts toward paying his credit card debt as aggressively as possible, at least until he’s eligible for his employer’s 401(k) match program. After this, he can start thinking about emergency funds and 401(k) contributions.
Once he starts putting 5% of his salary towards a 401(k), the remainder he has available can continue to be put toward his credit cards until they’re paid off.
Depending on the interest rate of his student loan debt, he may want to consider pulling back on how much he puts toward his debt. If the rate is low, he may want to contribute more to his 401(k) or establish an IRA.
But as previously stated, as long as Jordan has debt, any interest will reduce his savings. There’s also the mental aspect of carrying debt, which will continue to weigh on his peace of mind.
With a high student loan balance, many borrowers struggle to imagine climbing out from under the weight of the debt. However, it’s possible to refinance your student loans to make the monthly payments easier and even pay off your debt in less time than expected.
With College Ave, you can get a better plan to pay off your student loans, and potentially even reduce the total cost of your loan.
The quote process takes just a minute to complete, and offers you the option of a fixed or variable interest rate on your new loan, with no application or origination fees. Plus, you can even get lower interest rates when you sign up for auto-pay.
Get your quote now and you could be on your way to reducing your student loans and your financial stress.
Jordan may be in a financial hole, but with his new job, he’s in a solid position to dig himself out.
He may want to consult a financial advisor, who can help him develop a tailored blueprint to get out of debt and set himself up for the future. But either way, he can rest easy knowing there’s a path forward to achieve his goals.
If his debt is hard to manage, Jordan can even consider a consolidation loan, which can help him save money on his credit card repayments and possibly contribute more to his savings.
Consolidating your debt with a personal loan from Credible can be an easy way to find a consolidation loan that works for your budget and your debt amount.
Their online marketplace of vetted lenders provides personalized debt consolidation loan offers based on your needs, allowing you to pay off your debt more efficiently at a fixed rate without juggling multiple bills. This can make Credible an easy way to streamline your debt repayment at an affordable rate.
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TransUnion (1)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.