Okay...so this may be the wrong forum in which to ask this, but I'm going to anyway.
I need as many opinions as I can gather on a personal financial decision.
Chip and I are undergoing a Total Money Makeover via Dave Ramsey's book of the same title. We have made a lot of headway on our debt (see tomorrow's update if you want to celebrate with us), but still have a way a go.
We have our baby emergency fund of $1000 in place.
We are knee deep in paying off our debt. We have tackled two smaller credit cards and eliminated them from our lives (happy dance!). We are about to pay off some medical debt and start in on one of our two remaining credit cards...both of which are enormous, I'm ashamed to say.
So part of Ramsey's teachings are that all retirement contributions should stop until debt is paid off. I currently contribute the equivalent of $450 a month into my 401k at work which is matched at 50% (in other words...along with my $450, work will put in $225 for me). I'm 30 years old, so this has a LOT of time to grow still.
We estimate that we can have our debt paid off in approximately 1 year at the rate we are planning to move. We hope to make it sooner, but 1 year is aggressively realistic.
I get that once we are debt free I can contribute even MORE to my 401k (which will pick up again as soon as debt is gone), and therefore get more matched, but the thought of losing 1 year of contributions makes me wary.
What would you do? Would you throw that $450 a month at the debt and knock it out more quickly or would you leave it alone and use what you have now in take-home pay to knock out debt while continuing to fund retirement? Am I just being too careful or am I being smart to want to keep funding retirement?
Asking for help will hopefully work for me. If you want to see what works for everyone else, head over to Rocks in my Dryer, who is guest hosting this week!