Dear Dave,

My wife and I have two kids and one on the way. We’re debt-free except for our home, and we have our emergency fund in place. We’ve also been saving for retirement, with me putting 15% into a 401(k) and her putting 10 percent into her retirement account. On top of all this, we’re putting a little money toward college funds for the kids. We talked the other night, and after that we started thinking about pulling back from retirement saving and getting the house paid off. What do you think about that? 

Callen

Dear Callen,

I teach people to start investing 15% of their household income for retirement after they’ve completed Baby Step 3, which is saving three to six months of expenses for an emergency fund. Baby Step 4 would be both of you putting 15% of your income into retirement, and you’re not quite doing that yet. Saving for college comes next in Baby Step 5.

I don’t teach people to put less than 15% of their income into retirement in order to pay off the house a little earlier. It’s tempting when you’ve got the debt-free bug, but it’s not the shortest distance between where you are right now and wealth. The average person who follows my plan—the Baby Steps—can pay off their home in about seven years.

You’ve got offense and defense to think about, Callen. Defense is getting rid of debt, and the offense is building wealth. You don’t want to let your guard down on offense in order to just play defense and get the house paid off. What you’re talking about is a normal reaction for lots of folks in your position, but it’s not what I would recommend right now.

I love your fire, but follow the Baby Steps as they’re laid out. My goal isn’t just helping people get out of debt. It’s to teach people how to become wealthy as a result of being out of debt and encouraging them be outrageously generous along the way!

—Dave