Should you pay off debt or invest first? My 401k wakeup call

I was dumping every spare dollar into my 401k for 3 years, thinking I was winning at retirement, until I did the math and saw my credit card interest was eating up 22% of my gains. Turns out paying off that $4,000 balance would've saved me $880 in interest over 12 months, way more than my investments made. Do you guys prioritize killing debt first or just try to do both at the same time?

3 comments

3 Comments

the_viola19h ago

Wait, are you seriously putting money in a 401k while carrying credit card debt? That's like using a bucket to save water while your hose is spraying everywhere. Kill the high interest stuff first, it's a guaranteed return. Then go hard on investing once you're not bleeding cash every month.

elizabeths5119h ago

I remember reading somewhere that financial experts actually still recommend getting the 401k match even with credit card debt, because it's basically free money you're walking away from. But yeah, your mileage may vary depending on the interest rate you're dealing with.

the_william18h ago

Read somewhere that even Dave Ramsey tweaked his advice on this, saying get the match first then attack debt.

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