Dear Dave,

We just started following your plan and we have $39,000 in debt. We make $55,000 a year, and two of our smaller debts — one car and a credit card — are both $7,500. The credit card has a higher interest rate, so my wife thinks we should pay it off first. I look at the car as a necessity, and for that reason I think we should pay it off first. Who’s right?

Pat

Dear Pat,

When the rules of paying off debts from smallest to largest don’t apply, I look at things this way: If you have two debts that are of equal amounts, I would attack the one with the larger interest rate first. In your case, that would be the credit card debt.

I get what you’re saying about the car. You guys might be in a bind if something happened and you lost one car. But it’s also something you could work around if you had no other choice. So yeah, knock out the credit card first then move on to the car. Going this route will serve two purposes: First, it will save you some money. And second, I’ve got a feeling it will fire up your wife and get her on board with the plan even more than she already is.

She’s taking this seriously if she’s eyeballing interest rates, Pat. So use this momentum to work together, and knock out that debt!

— Dave