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  1. #1
    Hi All,
    I need advice on paying off my student loans. I turned 25 last year and a light bulb went off. I got a second job, built my emergency savings to $1,200, paid all of my miscellaneous debt (PayPal credit, QVC credit, dermatologist/medical bills), paid down my credit cards (2.5K), and made the final payment on my car today(7K).Now, aside from a line of credit that I took out for my boyfriend (He will have this paid off by mid March), the only debt I have is my student loans which total about 37K. My current plan is to build my savings to 10K by the end of August (1331/mo for 7 mo plus $500 this month) aside from my emergency fund then put ALL of my extra income toward my student loans (1331/mo plus 408/mo =1739/mo) and have there paid off in 2020. I am asking for help because my boyfriend’s parents feel I should focus on saving for a home which I could gain equity and feel I shouldn’t put so much money into my student loans. They are pretty well off and I highly value their opinion; however, I’m not sure if I whole heartedly agree with them on this. Below is a breakdown of my current state:

  2. #2

    Pay Student Loans or Save for home

    Emergency fund $1,200
    Acorns investing account $100 and counting
    Roth 401K $13K (currently contribute 10% of my biweekly check)
    No other personal savings/investments however I pay my bills one month ahead which gives me a bit of leverage outside of my emergency fund

    Federal Student Loan Breakdown
    My monthly payment is $408/mo and I’m on a ten year repayment plan with about 9 and a half to go..
    $1434.70@ 6.8%
    $148.40@ 6.8%
    $7,559.46@ 4.66%
    $5,671.67@4.66%
    $2,254.85@ 4.5%
    $1,471.28@ 4.5%
    5,716.01@ 3.86%
    4,793.86@ 3.86%
    1,075.15@ 3.86%
    3,637.57@ 3.4%
    2,906.48@ 3.4%
    Total: 36,712.71

  3. #3
    My boyfriend and I split rent, utilities, insurance, and food down the middle. We’ve been together since I was 15 (10 years) and I highly doubt a breakup will negatively impact my plan.

    Income
    Primary job 2400/mo after taxes (331 of this goes to savings/debt)
    2nd job 1000/mo after taxes (1000 goes to savings/debt)

    I know exactly how much I have available in extra income and that’s $1331/mo. My question is how to apply these extra funds. Should I stick to my current plan, build my 10K in additional savings, then aggressively pay off my student loans or should I listen to my boyfriend’s parents and focus on saving for a home which I can build equity in? I’d greatly appreciate any advice or critique of my current plan.

    Thank you,
    Kim

  4. #4
    I was in your exact same position at age 25. Debt, family, career, all the same. I won't tell you what i did, but my current girlfriend at the time and now wife of 18 years agrees we suffered because we did things in the wrong order. In retrospect I strongly strongly recommend you separate your finances and live as an individual until you marry and combine your money. It changes your relationship and ensures a long healthy relationship. Also, do not be pressured by your future in-laws. Draw a line now or it will affect you your entire life. My wife and I gave in and bought a house. It caused lots of stress in our young relationship and marriage. It almost caused the end. And when we had fertility problems and were strapped with student loan debt and a house it delayed our family plans. So do what your heart tells you and use this time to aggressively pay off the debt. And date your boyfriend and act married after you are married. My wife and I wish we followed that advice.

 

 

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