Bigger Emergency Fund or Sell Home?
Penny asks Dave what she should do about paying back student loans and piling up an emergency fund.
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.