The Personal Finance Podcast

Should You Pay Off Debt or Invest First? The Answer Might Surprise You (Money Q&A)

Sep 29, 2025
Dive into a lively discussion on whether to tackle debt or invest first! Learn the best strategies for managing an emergency fund and using bonuses wisely. Discover how to allocate your tax refund effectively and explore essential resources for getting started in real estate investing. Plus, weigh the pros and cons of selling your home versus keeping it as a rental to optimize your finances. Tune in for transformative advice and tips that can reshape your money journey!
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ADVICE

Emergency Fund Then Prioritize Investing

  • Build a 1-month emergency fund, then pay high-interest debt, then reach 3 months before splitting savings between emergency and investments.
  • Start investing once at 3 months using a 50/50 split and prioritize employer match, HSA, Roth, then 401(k).
ADVICE

Invest More Than You Prepay Mortgage

  • Favor investing over extra mortgage paydown unless your mortgage rate is unusually high.
  • After reaching a six-month emergency fund, allocate a small portion (e.g., 20%) to extra mortgage payments if desired.
ADVICE

Use Bonuses To Kill High-Interest Debt

  • Use windfalls to eliminate highest-interest debts first, especially credit cards and 12% personal loans.
  • Don't prioritize Roth IRA contributions until high-interest debts are cleared and a basic emergency fund exists.
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