Big Debt Stay in BS2?
Dave says it's fine for Richard to treat his truck like a house in the debt snowball, since he's a self-employed truck driver.
ANSWER: If you’re treating the truck as your house, then you can pay off the remaining $10,000 in debt very quickly. Next, you should go to baby step three – getting three to six month’s worth of savings in the bank. In baby step four, you should start putting 15% of your income into retirement. Baby step five is saving for your kid’s college and baby step six is paying off the house.
Dave says you could also have the truck paid off quickly at the rate you’re going, but it’s fine if you want to treat the truck as your mortgage – just as long as you follow the baby steps.
Dave also says you should go with the ESA first. Then, if you want to put more in later, you can find a flexible 529. Just don’t break a bunch of rules to put your kids through college. Follow the order of the baby steps.