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Originally Posted by JinCO
maat55 - It seems like you are a little over the top on some of your advise / comments. We are actively paying down are debts. We are hoping to be able to reduce our debt load by $25K this year. As our income increases this will be accelerated. I don't understand how you could suggest that we pay debt that is at fairly low interest rates before investing in our 401Ks. We would end up paying more in taxes if we did not invest in our 401ks, not to mention the free money from the employer match. This is not sound financial advice.
Obviously I would prefer to have no student loan debt, but I believe that this was a good investment and would not make a different decision if I had the opportunity today. We could not have financed our education with less money. We could have achieved a similar degree for less money, but when you go to graduate school the school that you attend impacts the amount of money you will make upon graduating. Most of our loans is for my wife's degree who went to a top 10 business school. Going to a lesser school would have been cheaper but also would have had a smaller financial upside.
I think a lot of our differences of opinion come down to risk tolerance. I do not lose sleep at night or stress about the fact that we have a lot of debt. I am trying to make good financial decisions based on my current state of affairs, and not make decisions based on fear. I agree with a lot of the people who have suggested that we increase our emergency fund, and we will do that. I don't agree with paying off debt just because debt is bad or because it will improve our "peace of mind".
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I consider myself a conservative in a room full of moderates and liberals. My advice is not intended to be a long term plan, but a rather fast track plan. No matter what you do, you will probably reach the finish line with large sum of money. My suggestions are based on getting out from under a threat you carry along the way.
My advice in a nutshell has been for you to protect your position with an EF and ins, Payoff your unsecured debt and then invest for the future. Use it, loose it, what ever.