Keep Funding Retirement?

Carrie and her husband should only invest in their 401-K plan after they’ve finished paying all their debts except the house.

QUESTION: Carrie and her husband have $30,000 in credit card debt, $13,000 in a home equity loan, and a $70,000 mortgage.  They stopped paying on the credit cards last year.  They bring home $50,000 a year and they have a 401-K.  Should they keep funding their retirement while they have this debt?

ANSWER: Stop the 401-K immediately and work your way through the baby steps.  Only invest in your 401-K plan after you’ve finished paying all your debt except the house.