⚖ Should you pay down debt or build savings while rent free?

You have a rare window to reset your finances before a $2,000/month DC lease kicks in. The tension between paying down student loans and building a $22,000 emergency fund is real. This calculator compares the math of both paths so you can decide whether to prioritize debt payoff or safety net savings while living rent-free.

You have a head start with your current savings, but living in a high-cost area like DC means you need a solid emergency fund. Enter your current cash and your target safety net.

Enter the debt you are considering paying down. For this scenario, we focus on your student loans, since your car lease is at 0% until 2027.

Your total monthly payoff budget must cover the minimum payments for all your debts, with enough left over to attack the target debt. If your budget does not even cover the first month's minimums plus interest, your balances will never shrink.

The CFPB frames the choice by motivation: pick the highest-rate method if you are motivated by saving the most money, and the snowball method if you are motivated by seeing progress quickly.

This view was inspired by:

• debt-avalanche-vs-snowball

For further related reading, check out:

• Reddit