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Last show I saw, a caller says she's 'addicted' to saving. The woman has $7000 in the bank and has a $7000 car loan. Bank pays 1%, car loan costs 6%. Simple math right, Suze? Pay the loan off and you're 5% to the good? WRONG! The first rule is to protect yourself from ruin. To have enough in the bank for emergencies. You didn't ask how much she made or what other savings she had. Or what she would do if she lost her job. The right answer is: Find a good money market fund or CD that will now pay 4%. Now your difference is only 2%, $140/year is a small price to pay to avoid getting evicted if you lose your job. This is part of the lesson of balancing the debt side and the savings side. It CAN make sense to be paying loan interest while saving, especially in retirement accounts. If your employer matches your 401(k) savings, maybe the first 5% you put in, it makes sense to fund the acount with that amount.

Of course the above numbers will change depending the current rates. And more important, the format of the call in show really didn't allow for the follow up question needed for Suze to give advice more specific to the caller's circumstance. I'll put this one in the 'grey' area, where her advice may have been right, although mine would have been different given the limited information.

I'd have quickly asked about her emergency funds. If she lost her job tomorrow, how would she pay her bills for the next few months. If she said she had futher funds or available low interest money, Suze's advice may have been what I'd suggest. But, as I say above, if she had a matching 401(k) that she wasn't taking advantage of, that would be the investment route of choice. We'll never know.