Priorities After Debt Freedom
Lauren and her husband are about to be debt-free. They need a few things after they're debt-free. What should their priorities be? Lauren gives Dave the list, and Dave helps her decide.
QUESTION: Lauren in St. Louis and her husband are about to be debt-free. They need a few things after they're debt-free, though. What should their priorities be? Lauren gives Dave the list, and Dave helps her decide.
ANSWER: I can tell you what I would do based on the numbers you gave me. The first thing I would do is get my emergency fund to three to six months of expenses. Then I'm going to list some of these other little odds and ends, and then I'm going to start looking at other things in order of how you want to prioritize them. I'm going to knock out these little things, and then I'm going to start saving for a house.
The order doesn't matter. Which one do you want to do first? Your number-one goal is to get $9,000 in the bank. You don't buy a house until you have three to six months in your emergency fund, and you need to have a reason to not have six months, meaning you've got two very stable jobs and everything else is really, really good. Nine grand is not much to have in the bank making $120,000.
You're not asking me to buy a $30,000 car in this mix. I think these are all really good, wise moves based on someone who has sacrificed to get where you are. You're people who've been holding their breaths; I'm saying take a breath.
Sharon and I do every other. She gets one. I get one. Your goals are all pretty equal. Do one of yours, then one of his. After that, put your other $9,000 in the bank and start saving for your house.