One of the most common questions we hear — especially from younger professionals and the adult children of our clients — sounds simple: Should I pay off my debt first, or start investing? In this summer episode of the Tall Oaks Podcast, Branden DuCharme sits down with Marcus Corvino, the Ramsey-certified financial coach in our practice, to unpack why the honest answer is rarely “one or the other.”
Which debt do you pay off first?
Marcus starts where every good debt conversation should: what kind of debt are we talking about? A $100,000 student loan and a $500 credit card balance call for very different game plans, because the timeline to attack them is so different. For most people, the conversation begins with everyday consumer debt — credit cards — and the goal is to isolate the debt that’s weighing on you most and start there.
That raises the classic strategy question: do you tackle the smallest balance first, or the highest interest rate first?
Snowball vs. avalanche
The two schools of thought each have a name. The debt snowball, popularized by the Dave Ramsey program, has you order debts smallest to largest, pay the minimum on everything, and throw every extra dollar at the smallest balance. Once it’s gone, that payment rolls into the next-smallest — and the payoff accelerates over time.
The avalanche (or “waterfall”) method instead targets the highest interest rate first. As Branden and Marcus both acknowledge, the avalanche wins on pure math — it costs less out of pocket over the life of the payoff.
So why does Marcus so often reach for the snowball? Because personal finance isn’t only math. He describes coaching a client who was drowning in the stress of juggling ten different debts. When he walked her through the snowball — showing how she could eliminate one debt in a month, another the next, three of them gone in six months — he could see her light up. That motivation is the point.
Progress vs. wins
Branden framed the behavioral insight in a line that became the heart of the episode: you stop making progress and you start making wins. Finance is a game where patience is the hardest part. We live in a world of instant gratification, and when a payoff plan stretches out over years, “14 more months… 12 more months” is exhausting. Checking a debt off the list entirely — an actual win — is what keeps people motivated to keep the belt tight.
Marcus added the flip side: constantly refreshing your balances to watch the interest accrue can drive you crazy. Sometimes the few dollars you’d save with the mathematically optimal route aren’t worth the stress they cost you. And the behavioral risk is real — start the “optimal” plan, get discouraged, and pause it for three or four months, and it can end up more expensive than the plan you’d have actually stuck with.
When do you start investing?
Here’s the question that sparks the most debate: at what point do you start investing while you still carry debt?
This is where Marcus respectfully parts ways with the strict Ramsey approach, which holds off on any investing — even retirement accounts — until all debt is paid off. His reasoning: if you have an employer-sponsored 401(k) with a match, that’s very hard to pass up.
The math is striking. As Branden laid it out: put $3,000 into your 401(k), and if your employer matches $3,000, you’ve earned an immediate 100% return on your contribution — you’ve doubled your money before the market does anything. Even if you’d otherwise have thrown that $3,000 at a 30% credit card, the match still leaves you net ahead. The takeaway both of them land on: contribute enough to capture the full match, take the free money, and keep attacking the credit cards aggressively.
The genius of “AND”
Branden’s phrase for it — one his team hears around the office often — is don’t fall victim to the “or”; embrace the genius of “and.” It’s not invest in the 401(k) or pay off the credit card. It’s fund the match, get the free money, and keep paying down the debt. Yes, aggressively investing while paying debt slows the debt payoff slightly, but your net worth grows faster — and net worth is what actually matters at the bottom of the page.
No employer match? Think tax-advantaged.
What if there’s no match? Marcus still favors using a tax-advantaged account — a 401(k), or a SEP or solo 401(k) for the self-employed. His rule of thumb: aim for 10% of your gross income toward retirement at any age, and more if you can afford it. His reasoning is time. Building net worth is a time-based game, and the first ten years of investing are often the most important. Delay a decade and you’re starting from zero, a decade behind.
Branden added an important nuance on terminology. Rather than assuming pre-tax is always right, the better word is tax-advantaged. A high earner may benefit from pre-tax (tax-deferred) contributions — but someone earlier in their career, or with a bright earnings trajectory ahead, may be better served by Roth contributions and their tax-free growth. Which one wins can change year to year depending on income and circumstances. The constant is capturing the tax advantage, whichever form fits.
Car loans: pay off, or let it ride?
Once the credit cards are gone, the next domino is usually a car loan — and here Marcus again looks at the interest rate rather than following a blanket rule. He shares his own example: a 1.9% rate on a new car through an employer benefit. There was no way he was paying that off early. As Branden put it, if someone offered to lend him a fortune at 1.9% fixed, he’d take it every time.
Marcus’s rough guideline: if your car rate is under about 3%, you’re fortunate — let it ride. Once you’re into the 5–8% range, it’s worth a closer look, factoring in how much of your take-home pay the payment is eating.
The “0% interest” car loan myth
Branden offered a friendly reminder worth repeating: there’s no free lunch in finance. When a dealer finances a car at 0%, money is never actually free — the cost is just hidden, usually baked into a higher price for the car. You still pay for the loan; it’s simply harder to see your effective rate. In fact, it’s often smarter to negotiate a lower price and accept a slightly higher rate, because if rates fall you can refinance — you’ve locked in optionality that a “0%” deal on an inflated price doesn’t give you.
What really holds people back
The bigger lesson isn’t about any single rate. Looking at people in their 40s, 50s, and 60s, Branden points to a recurring theme: it’s not financing a car that hurts them — it’s financing more car than they can truly afford, over and over, rolling one loan into the next. If you have the assets and land a 2% loan, that’s smart use of leverage. If you’re financing a $30,000 car with $1,000 to your name, that payment owns you.
The retirement math makes it vivid. Someone who financed cars their whole life may reach retirement needing to pull six figures out of an IRA to clear those loans — and because that withdrawal is taxable, they have to pull out even more to cover the taxes, potentially knocking 15% off their retirement savings just to own the cars. Wanting a nicer car isn’t the problem; understanding its true long-term cost is the conversation.
Where to start
For most people, the sequence clarifies things: knock out consumer debt, capture the employer match along the way, then weigh car loans and student loans against their interest rate, your time horizon, and your capacity for risk. As Branden put it, there’s nothing wrong with the prudence of paying a car off — unless you’re sophisticated enough to manage the whole balance sheet deliberately. The right answer depends on your goals, what keeps you up at night, and where you want to be at retirement.
Have questions for Marcus? You can reach him on Instagram at @marcus.at.dwm.