Using these principles, I can now make some general recommendations.
- Live similarly to the way you did as a resident for a couple of years so you have the cash flow to pay down your debts within two to five years while still maximizing retirement account contributions.
- Be sure to contribute enough to your 401(k) to get the entire match.
- Pay off those credit cards as soon as possible.
- Stop buying cars on credit. Once the car loan is paid off, continue to make car payments into a savings account so you can pay cash for your next car.
- Stop using credit cards for credit.
- Consider refinancing student loans with a private bank.
- Consider refinancing your mortgage into a fixed-rate mortgage to protect you from rising interest rates.
- Decide on what order to pay off the students loans, either smallest first or highest interest rate first. If interest rates rise, move the variable rate student loan to the top of the list.
Dr. Dahle is the author of The White Coat Investor: A Doctor’s Guide to Personal Finance and Investing and blogs at http://whitecoatinvestor.com. He is not a licensed financial advisor, accountant, or attorney and recommends you consult with your own advisors prior to acting on any information you read here.