Dear Dave,
My husband and I have paid off all our credit card debt, and we are following your Baby Steps plan. We still owe about $40,000 on two cars, and our combined income is around $150,000. Since we have a good income, we were thinking about finishing our emergency fund and contributing to our IRAs while we finish off the car payments. Under the circumstances, is this OK?
—Paola
Dear Paola,
I understand the temptation you guys are facing. But there’s a power in behavior modification on a short-term basis that supersedes the power of mathematics. Stick to the plan and pay off the cars first.
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