Quote:
|
Originally Posted by vishenda
one, two and three in that order. Get rid of debt and keep it gone. This interest is not deductible and therefore costs much more than you think. For example if you are in a 30% tax bracket and you are paying 18% interest you are really paying 25.75% interest because you have to pay after tax dollars to pay a nondeductible debt.
An emergency fund of three to six months would go a longer way to keep your peace of mind stable.
retirement and college savings are important. If needbe you can tap IRA's for education.
|
(bolding added)
I wanted to point out that, while most interest isn't deductible, some is -- interest on a mortgage/home equity loan and interest on student loans. So if you have a credit card that is slightly lower than your mortgage (say, 4.99% credit card vs 5.5% mortgage), smart money would be paid on the credit card.