<prompt> Human: Im 23, just a started full timereal job seven months ago. Have three months expenses in emergency fund. Just took out a loan for 12,000 for a car. On the Dave Ramsey website his financial baby steps suggest paying off all debts except home loan before funding a IRA. Should I pay off the car as fast as possible or save up 3,000 to start a Roth IRA and then pay off the car?Extra info: This is the only debt I have. Loan is 5 for 71 months. I will make between 32,000-37,000 this year plus 0.55 for every mile I drive. I drive 300 business miles a week. I am a beer sales rep all the free beer I get is supposed to make up for the shitty pay. If any other info would be helpful let me know.  <response>: I have to agree with Dave Ramsey on this one. When making personal finance decisions you need to be thinking about what might happen and what the consequences might be. For instance, lets say the big boy job doesnt work out for no fault of your own. Oh I dont know, your company turns out to be idiots and the go out of business a year from now.You would now face a situation in which you would no longer have the income but would still face the payment. Do you know what happens when they repo your car? You pay the difference between what the car is worth and what you owe right? Nope. They sell your car at about 25 of its actual value and charge you the difference between their sales price and what you owe. So in your case you would end up with about 8000 in debt, no job and no transportation. Personal debt is the greatest threat to your financial stability. Besides the longer you pay on the car, the more of your hard earned money you put in someone elses pocket through the interest paid. Wouldnt you rather have that interest for yourself?The traditional argument for investing is that you _will_ earn more money through the investment than you are paying in interest on the car. This isnt always the case. So what happens if you lose your job a year from now and need to make your payments and the economy is way down? perhaps that is why you would lose your job? That would mean that your investments might be way down as well and you wouldnt have the money to pull out of the Roth to pay your car loan.In this one I agree with Ramsey. Pay your debt off first. Then start on your retirement. Debt is a bigger threat to your financial stability. If you want to know more you should either take Ramseys class online. I also have a personal finance book which you might find helpful. 