If one could create a financial “fantasy” world, the first thing most people would dream of is a world without debt. The next thing in my dream financial world would be having plenty of money so my family and I could enjoy a different quality of life, and maybe even help others to do the same thing.

Are you all with me on this dream? Of course you are- who wouldn’t want to be free of debt and have oodles of cash. Unfortunately for many of us this notion is about as likely as having dollars fall from the sky.

So what does a person do that has debt, wants to make more money (without losing more hours to work) and have a savings for emergencies and retirement?

If you have a relatively fixed amount of money to work with, such as your salary, it may be difficult to decide where to put your money if it just doesn’t seem to stretch far enough.

As with most decisions relating to finance, it might help to start with a list. Begin by adding to your list all your debt and the corresponding interest rates to see which you need to pay off first. Then look at options for savings and investing and if needed reprioritize your list.

1) Pay off high interest credit card debt. I cannot think of an example where you would not want to do this first. If you are paying the minimum payment on a high interest credit card balance you might as well take that money and rip it up. You will never get out of debt and you are simply throwing your money away to pay the interest.

Any extra money that you can squeeze out of your budget should go toward your credit card debt. The only exception is if you participate in a 401 (k) plan that your employer matches. In that case you simply must continue to contribute the maximum you can afford to take advantage of the employer match.

2) Not all debt is bad. In the case of your mortgage or student loans you don’t necessarily have to be in a rush to pay them off years early. Once you address your high interest credit cards, you should look at your mortgage agreement and if you are comfortable with your payments, start looking into liquid assets.

After all, you do get a deduction for interest paid, just be sure to have your home paid off before retirement. Who wants to put money in retirement now that will be later used to pay the same mortgage?

3) Invest and Save. Once you have tackled your high interest debt, it is time to invest and save. Not only do you want to put money away for retirement, but you also want to have an emergency fund. Your goal should be at least 3-6 months salary.

In the event you lose your job, or need emergency money for medical or household bills, you would have your emergency fund to fall back on rather than using credit cards and continuing the cycle of indebtedness.

While it may seem unlikely to do all three things at one time, it is possible to do all three things. You just have to have a strategy in place. Who knows, maybe one day money might fall from the sky, but until that day comes you might be better served by sticking to Plan A.