Hi all -- I've been focused on paying down debt, but am starting to think I need to adjust my strategy to a more balanced approach between debt payoff and retirement savings. What approach would you take and why?

Current Debts (86,126):

Mortgage (5.4%): 16,351

Federal Student Loan (5.16%): 20,997

Private Student Loan (3.59% Variable): 41,290

Truck Loan (1.99%): 7,488

In 2015, we put 34% towards debt (calculated off of gross salary)

Current Retirement Savings:

Me: 4% into a 401K at work, 4% match

HB: 4% into a 401K at work. 10.5% additional. (Yes that's a 262% automatic return)

This works out to be about a 9% savings rate (based off gross salary) for retirement if you count the matches as extra compensation.

Income: 2 earners about 140K/yr combined gross income.

Emergency fund: Live on last month's income + ~2k in targeted spending account that could be tapped for emergencies if needed. Works out to be about a 1 month emergency fund.

Current Strategy:

1. Save into 401K the minimum to get matches.

2. Put all extra money on to the highest interest debt -- our mortgage -- at 5.4%. The mortgage interest is not tax deductible. Also this is on an adjustable rate that will increase to 7+ percent in 2019. Payoff likely in Oct 2016.

3. Put all extra money on to the 5.15% student loan. With the student loan interest deduction, the effective interest rate is 3.86%. Payoff expected in February 2017?? See here for rational for why the effective interest rate is lower than actual interest rate:

http://forum.mrmoneymustache.com/ask-a-mustachian/student-loan-interest-deduction/This is where we hit a turning point, as we will have paid off all debt with a 5%+ interest rate.

**What would you do next, and in what order would you do these things? Would you balance between debt payoff and savings? **Total debt would be about 43K at that point, mixed between the 1.99% car loan and the private student loan at a variable 3.59% (effective interest rate 2.69% because of the student loan interest deduction).

Some options:

- Save up emergency fund to at least 3 months worth of expenses (~12k). Might want to pad even further because considering having kids in the next 18 months. Would need to plan for unpaid leave for maternity leave.

- Pay off truck - gets rid of minimum payment in 1-2 months worth of extra debt repayment but is a very low interest rate. Definition of a quick win.

- Bump up 401K contributions - HB's would have priority as my 401K has a terrible expense ratio of .75%

- Save for a house payment so we can stop living in a mobile home.

- Continue to go full-throttle on debt repayment and be debt free in an additional 15 months.

Any suggestions are welcome!! Please let me know if you have questions / need clarification.