Why Save for College Before Paying Off House?
Dave settles the debate between Kelly and her husband about the order in which to take the Baby Steps.
QUESTION: Kelly and her husband are having a disagreement about the order in which they should do the Baby Steps. Why does Dave tell people to save for college and retirement before paying off the house?
ANSWER: The reason I tell you to save for college and retirement before paying off the house is because I’ve counseled 72-year-olds who have a paid-for house with absolutely no retirement savings.
You only need to contribute 15% to your retirement, which should leave you plenty to save for college. Our BRAND-NEW book will teach you how to pay for college without student loans. Don’t let your kids fall into the student loan trap.
Then, you can pay extra on the house to get it paid off sooner. The average baby-stepper pays off their house, while funding their retirement and college savings, in seven years, after complete the first three Baby Steps.