Big Student Loan ... Should Our Emergency Fund Be Bigger?
It will take a while for Penny to get out of debt. Should her emergency fund be bigger in the meantime?
ANSWER: Since it’s going to take you so long to pay off that student loan, you should go back to Baby Step 1 and build up your emergency fund to about $3,000. Then go back to Step 2 and finish paying off the student loan. You’re going to be at it for a while on your income, so you need to have more of a cushion in savings.
Don’t sell your home. Your payment is not out of line.