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Pay of some of student loans or add on to the savings

Posted by on Aug. 10, 2014 at 2:51 PM
  • 14 Replies

Lately I have been thinking that my family (husband and two daughters) will forever depend on me to be the bread maker of the house. Currently we are not in the best situations, but we are not in the worst either. I am almost done with school; after this year I only have one more year left, and then I am done with my bachelors. I have been able to secure this year student loan free. This entire year is paid for by scholarships and grants. That a lot considering my school is $31,000 a year. Anyway, I have managed to save a little bit over $1,000. If I were to pay a little bit more than minimum payment on my bills and add all my reoccurring monthly bills, my total monthly debt would be a little bit less than $1,000 (Although I do not pay rent, I pay all the utility bills which is why my debt is so cheap). They say to save at least 6 months of your monthly debt.

On my student loans, by the time I graduate I should owe no more than $28,000. The majority of my student loans are subsidzed but $4,000 is unsubusized. Should I pay the $4,000 that is gaining interest or should I add more on to my savings?

by on Aug. 10, 2014 at 2:51 PM
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Replies (1-10):
bluelace777
by New Member on Aug. 10, 2014 at 4:37 PM

You should add to your savings especially since you are the breadwinner. You *should* have at least 1k for your emergency fund plus 3-6 months living expenses saved.

michiganmom116
by Gold Member on Aug. 10, 2014 at 4:53 PM

pay on those unsubsidized loans!  The interest is killer!

ivf_blessed
by Bronze Member on Aug. 10, 2014 at 5:33 PM

IMO, you should make sure you have about $1-$2k in savings and then drill down your debt.

clairewait
by on Aug. 10, 2014 at 6:05 PM

I'm always in the camp that says get rid of all debt before increasing savings.

elizabooks
by Member on Aug. 11, 2014 at 9:34 AM
If you split it (2000 in sAvings, 2000 on loans) would the loan get paid off before you graduate? If so, split it. If not then pay it off. The interest can be brutal.
chicken13
by Member on Aug. 11, 2014 at 11:14 AM

Interest first. 

baconbits
by on Aug. 18, 2014 at 3:26 PM

 I'd make sure I had something in savings. Maybe $1500 - $2000 in case of an emergency but the rest I would put on the loan. Chances are the interest on the loan is higher then what you would make in interest if you put it in a savings account.  It also means if you could manage to pay that $4000 loan off before you graduate you would only have one loan payment per month instead of 2.

cwahtomy
by Member on Aug. 20, 2014 at 2:37 AM

I would pay the loan first. If you're going to put extra on it pay what the minimum is and then send a payment in a few days later saying that you want that extra money to go to the principle to get it paid off faster.

melindabelcher
by on Aug. 29, 2014 at 10:17 AM

Save first. 

If an unexpected bill or expense comes along you'll either have to deplete your minimal savings or borrow. Better to have a little extra in savings. Then pay down your loans

mewebb82
by Member on Aug. 29, 2014 at 10:20 AM
Pay those loans! Interest on student loans is ridiculous, so I would pay that down as much as possible so in the end I am paying as little as possible.
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