My DD is a 30 year old, financially responsible, single, medical professional at the top of the 25% tax bracket (or just barely in the 28% tax bracket). She is currently contributing 6% to a 401K and has a $28,000 student loan at 3.25% interest and a $15,000 car loan at 3% interest.
In what order should she be applying excess cash?
1. Increasing 401K?
2. Paying off a student loan (highest interest rate)?
3. Paying off her car loan (smallest balance)?
or
1. Paying off her car loan (smallest balance)
2. Pay off a student loan - eliminate all debt
3. Increase 401K
( I think the above is what Dave Ramsey would recommend?)
or
Some other order?
Looking for recommendations on what makes the most financial sense as well as what makes the most psychological sense.
In what order should she be applying excess cash?
1. Increasing 401K?
2. Paying off a student loan (highest interest rate)?
3. Paying off her car loan (smallest balance)?
or
1. Paying off her car loan (smallest balance)
2. Pay off a student loan - eliminate all debt
3. Increase 401K
( I think the above is what Dave Ramsey would recommend?)
or
Some other order?
Looking for recommendations on what makes the most financial sense as well as what makes the most psychological sense.