Question: I’m a 24-year-old who makes ~$60K a year, living in a very expensive city with ~$50K of student loan debt (I hold a masters). My question is this: I’m about to reach my fairly modest savings goal, which coincidentally is the same as my current credit card debt. Should I pay off the credit card and start the savings over, split it half, or hang on to the savings, stop putting money in, and be more aggressive with the card? Thank you! Michael, Washington, DC

Answer: I visit D.C. a fair amount to see family and it is an expensive city. Now, I can guarantee that you’ll feel good paying off the credit card debt in full (been there, done that). That said, I’m wary of draining all your savings all at once.

Take a look at your finances, but how about putting a third of your savings toward the debt or maybe half. The remaining two-thirds or half is your buffer against a setback, such as engine trouble and a way to take advantage of an opportunity if one comes your way. I would aggressively attack the debt.

Once you’ve eliminated the debt you can start adding to your stash of savings again.