<prompt> Human: TLDR:I am a young professional. I have debt, and assets. I want to see what rpersonalfinance thinks about my strategy to become debt free, and in turn see if it is reasonable to give up my assets to do so.My Assets:Car FMV: 22,000401k: 6,500Savings: 3,000Total Assets: 31,500My Debt:Car Loan: 14,795Student Loans: 8,130Total Debt: 22,925Slightly more in depth analysis of my strategy. I am 25. I have a steady full time job as an accountant where I make around 30,000 per year I know its low, but I live in a low income area of the country, so living expenses are quite low My car payment is currently 270 a month, and student loans about 150 a month. Total of 420 per month.If I sell my car for close to the fair market value and pay off the related note, that leaves me with 7,205. I walk to work, so I could then buy a reliable, older car that would still do the trick just fine for 7,000. Not to mention the savings on insurance to go from full coverage on a brand new 2014 car, to just liability on an older car.The hard question then becomes, do I, at 25 years old, tap my 401k and drain my savings account to pay off my student loans. By tapping the 401k, I lose 25 of that money 10 early withdrawal penalty, 15 income tax bracket leaving me with around 5,000 to actually play with. My company matches my contribution and the account has earned about 1,000, so I will still be getting more out of it then I ever put into it. 6,500 less 1,000 5,500 then divided by 2 co. match 2,750 that I have personally contributed So between my savings of 3,000 and my 401k of 5,000 I could pay off all of my student loans. I can then begin to build back up my 401k and save an extra 420 a month. I would replenish my savings in about 7 months at this rate. I would also have 0 debt. ZERO DEBT! I think that would be worth using up my assets at such a young age to achieve. I still have plenty of time to build back up my assets and I would not need to worry about paying a car loan, interest, and high insurance rates for another 5 years, or student loans and interest for the next 10 years.Does anyone agree with my strategy, or would it be better to retain my assets concurrently with my debt? Any thoughts, comments, or opinions are GREATLY APPRECIATED.  <response>: I like your plan with the car. If youre walking to work and only use the car for utilityoccasions ie, you dont really, really need the most reliable car, you might even consider going even cheaper than 7k. However, I agree with that general thought; 7k should get you about as much reliability as any car out there.Dont touch your 401k; however, you could consider ceasing contributions to it, even if you have a match, while youre rapidly paying off debt.Also, make sure to keep an emergency fund the whole time. Take 1000 of your savings and dont touch it, even to pay-off debt. If an emergency arises as soon as youve paid-off the loan, then youll have to go right back into debt.TL;DR: Downsize in car, dont touch your 401k other than adjusting your contribution, and keep an small emergency fund the entire time. 