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Ask Dave

Sliding and Snowballing

Shawn has income on a sliding scale. She has $5,500 in debt left and is in a position to further her education and increase her pay scale. Should she work on that now or wait until she's debt-free?

QUESTION: Shawn in Kansas has income on a sliding scale. Right now the household income is $95,000 (of which Shawn makes $47,000), but she and her husband don’t share money. She has $5,500 in debt left and is in a position to further her education and increase her pay scale. Should she work on that now or wait until she’s debt-free?

ANSWER: You are asking me to treat you like a single person who makes $47,000 and has $5,500 in debt. In that case, I would clear the debt before I buy more education. Then build your emergency fund of three to six months of expenses. Then I would start attending class again as I can pay cash for it.

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