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<<My employer matches .25 to 1 for the first 6% of my salary, with a 25/50/75/100 vesting period. I was planning on contributing the 6% to get the "free" cash, then plowing every penny left over into my various obligations (before I get used to the increased income). After I pay off all my debt (target 2 - 2.5 years), I was going to evaluate my financial position and determine at that time what to do.

Does this reasoning have at least some logic to it?>>

That line of attack makes superb sense. The faster you rid yourself of debt, the sooner you can have more of your assets working for you. And the earlier you get started on long-range saving, the better the effects of compounding on those savings.

One thing to remember about Step 4, though, is it gives you a tool for evaluating alternatives to your company plan. That's useful, but it's also meaningless for those who decide to shun that plan for something else and then divert the dollars from savings to consumption instead. The company plan forces you to save because the money is deducted from your paycheck before you see it, and it's also difficult to remove once it's in the plan. Money saved in a taxable investment is readily accessible, and it's too easy to succumb to temptation. Additionally, the daily pressures we all face make it too easy to say we'll just skip this month's deposit because of a financial "emergency." Both disrupt the compounding on savings and cause our personal plans to get off track. Savings discipline is the key to success and must be maintained at all costs or it's better off to stay within the plan regardless of how mediocre the choices may be.

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