Pay Student Loans or Save for home

[Smallsteps]

I personally would just throw all the money I could to pay off the student loans. I sent money on student loans I had every paycheck they dropped quickly and I could literally see the interest portion dropping.
If you are saving for 4 months to get a big chunk to pay......... is the account you are holding the money in at least pay you over the lowest interest you are paying on the loans?


I feel sending a bigger payment every month or regular extra payments will in the long run be better then waiting to save up a chunk the only reason not to is if there were any pre-pay penalty which I have not seem on any student loans I have seen.

[Benderz]

While he hasn't bought a house or done all that you have done, my youngest, ONLY has a debit card and he has bought airplane tickets, has rented cars, purchased items on line, etc. Well you know the drill.

That is really incredible. Your are doing a great job teaching you son. While a large percentage can use debt responsibly, you are also setting an example for the people you love. They watch you and think its ok. Then they get in over their head. Why would you endorse something that is a leading cause for divorce and teen suicide?

One of the best life situations my teenage kids have experienced is watching their parents deal with a major expense (a contractor took our down payment for a home renovation and disappeared). Yes it would be really easy to take out a line of credit, or whip out a credit card. But we choose to teach them how to do it the hard way. Better for them in the long run.

[MZKIMJACKSON]

1. Do YOU have a burning desire to be a home owner? If the answer is no, then stick with your current plan.

2. Let your boyfriend run interference with his parents. When it comes to potentially uncomfortable conversations or situations, I deal with my mom and my husband deals with his. 25 years married.

Thank you for your input! I'll stick to my current plan.

[Jluke]

Yep. Try to get rid of the two 6.8% ones asap.

I like a balanced approach to debt payoff and savings.

Why a Roth 401k and not a traditional 401k?

[MZKIMJACKSON]

I personally would just throw all the money I could to pay off the student loans. I sent money on student loans I had every paycheck they dropped quickly and I could literally see the interest portion dropping.

I thought of doing that but am worried something could happen whereas my small emergency fund of 1,200 won't be able to cover.

If you are saving for 4 months to get a big chunk to pay......... is the account you are holding the money in at least pay you over the lowest interest you are paying on the loans?

I wasn't saving to have a big chunk to pay but for the purpose of having a savings in case something happens such as losing a job etc. No matter what route I take, it will take at least a few years to pay these and don't want to just have $1200 in savings for that long period of time for security purposes. The 10K was to establish by savings, not to contribute to the student loans.


I feel sending a bigger payment every month or regular extra payments will in the long run be better then waiting to save up a chunk the only reason not to is if there were any pre-pay penalty which I have not seem on any student loans I have seen.

I'll take this into consideration. It seems my new dilemma is how much to contribute to savings and how much to contribute to the student loans.

Thank you so much for your input!

[Gailete]

"Hmm.. I never thought about how following in their lead will lead to things always being this way. I'll admit that I tend to go to them for advice but will make note to keep a handle on how much input I allow them to have. I also understand the possibility of a breakup and am preparing myself for the possibility by contributing more to my savings."

In laws are a tricky business at times. I could tell you my personal stories that would make your hair curl. A young lady at a church I used to go to had lost her mother at an early age got engaged and was basically taking all the advice that this MIL to be was dishing out. When I overheard some of the wedding plans my ears perked up and I had to ask 'why?' It was the bf mom's idea, the weirdest one being to have the reception first and then the wedding! Like why? What happens if she spills her drink or food all over her gown? Would she have to get married looking like she had been in a food fight? That was a disaster waiting to happen for sure. Of course other than her soon to be MIL liking the idea, she had no good reason to explain any of it. It all became a moot point as 1 week before the wedding he sent her a Dear Jane email, I believe was how he broke the engagement, wedding and got the girlfriend out of his life.

There are times that you have to set your foot down and if a guy won't run interference for you from his mother then he needs to be out of your life. It was nothing for me to come home and find my MIL digging up MY flower garden to put in plants that she wanted. I found her once messing around straightening up OUR shared closet. When I complained to me ex, he just said he wasn't going to get between the two of us, which in reality meant she could do whatever she wanted and I had to shut up.

Certainly I am not implying that your bf parents are like this, they may be the most wonderful folks going, but there are some areas where they shouldn't get in the mix. Money is one of them. Even though my current in laws are nice enough, when it comes to money we have learned to say no as we have learned any monetary 'gift' has strings attached. Well just about anything they do for us has strings attached.

Not saying all in laws have these sorts of problems, but there is a reason that there are so many MIL jokes. But it is much better to say that you will think about something and talk with your bf/spouse as well as study the financial dynamics before making any decisions. And if they ask two days later whether you have done all of the above yet, you just tell them thanks for the advice but you won't be doing that right now.

Because of my health problems, I use a stair climber to get me up and down the stairs. Well after about 8 years it bit the bullet and after several months of hubby trying to fix it, we had to replace it as it was so hard on me having to climb the stairs. We got it replaced and a few weeks lat my FIL asked hubby how much it had cost to replace as they wanted to help pay for it. Hubby told him and FIL apparently just about went into cardiac arrest and said he had thought it was only $100-200. So finding out how much it was and rather than giving something toward the cost to help out, that was the last we heard of it. Strange that he had been willing to pay about $200 if that was the total cost, but since it wasn't he didn't even give us a dime. That is okay because they always find a way to attach strings to the gift.

One of the things that you get to do as an adult, it to be an adult which means making decisions on your own whether your parents or in-laws like it or not.

[MZKIMJACKSON]

Yep. Try to get rid of the two 6.8% ones asap.

I like a balanced approach to debt payoff and savings.

Durn it, I'll do that. It does make more sense as opposed to me just wanting to see that money sitting in my account first and checking one thing off the list.


Why a Roth 401k and not a traditional 401k?

It's to my understanding that by contributing to a Roth, then I won't have to pay taxes on this income post retirement. Let me know if I should consider an alternate route. I'm definitely no expert when it comes to retirement and plan to contribute more to that post student loans when I can afford to make a higher contribution. I want to ensure I'm doing what's best long term

[MZKIMJACKSON]

"Hmm.. I never thought about how following in their lead will lead to things always being this way. I'll admit that I tend to go to them for advice but will make note to keep a handle on how much input I allow them to have. I also understand the possibility of a breakup and am preparing myself for the possibility by contributing more to my savings."

In laws are a tricky business at times. I could tell you my personal stories that would make your hair curl. A young lady at a church I used to go to had lost her mother at an early age got engaged and was basically taking all the advice that this MIL to be was dishing out. When I overheard some of the wedding plans my ears perked up and I had to ask 'why?' It was the bf mom's idea, the weirdest one being to have the reception first and then the wedding! Like why? What happens if she spills her drink or food all over her gown? Would she have to get married looking like she had been in a food fight? That was a disaster waiting to happen for sure. Of course other than her soon to be MIL liking the idea, she had no good reason to explain any of it. It all became a moot point as 1 week before the wedding he sent her a Dear Jane email, I believe was how he broke the engagement, wedding and got the girlfriend out of his life.

There are times that you have to set your foot down and if a guy won't run interference for you from his mother then he needs to be out of your life. It was nothing for me to come home and find my MIL digging up MY flower garden to put in plants that she wanted. I found her once messing around straightening up OUR shared closet. When I complained to me ex, he just said he wasn't going to get between the two of us, which in reality meant she could do whatever she wanted and I had to shut up.

Certainly I am not implying that your bf parents are like this, they may be the most wonderful folks going, but there are some areas where they shouldn't get in the mix. Money is one of them. Even though my current in laws are nice enough, when it comes to money we have learned to say no as we have learned any monetary 'gift' has strings attached. Well just about anything they do for us has strings attached.

Not saying all in laws have these sorts of problems, but there is a reason that there are so many MIL jokes. But it is much better to say that you will think about something and talk with your bf/spouse as well as study the financial dynamics before making any decisions. And if they ask two days later whether you have done all of the above yet, you just tell them thanks for the advice but you won't be doing that right now.

Because of my health problems, I use a stair climber to get me up and down the stairs. Well after about 8 years it bit the bullet and after several months of hubby trying to fix it, we had to replace it as it was so hard on me having to climb the stairs. We got it replaced and a few weeks lat my FIL asked hubby how much it had cost to replace as they wanted to help pay for it. Hubby told him and FIL apparently just about went into cardiac arrest and said he had thought it was only $100-200. So finding out how much it was and rather than giving something toward the cost to help out, that was the last we heard of it. Strange that he had been willing to pay about $200 if that was the total cost, but since it wasn't he didn't even give us a dime. That is okay because they always find a way to attach strings to the gift.

One of the things that you get to do as an adult, it to be an adult which means making decisions on your own whether your parents or in-laws like it or not.

Wow, you definitely have some stories. My future in-laws are great people but definitely think they know everything there is to know about money. Funny, they are similar in a sense where they will offer their opinion but wont offer to contribute one dime (not that we need them to). Funny how people work.

[MZKIMJACKSON]

Pay the student loans. It'll impede your ability to qualify for a mortgage anyway.

Thank you for your feedback

[MZKIMJACKSON]

I cut my credit cards up back when I had 30K of debt due to fertility and closed them as soon as they were paid off. I never needed them for emergencies or to build up a credit score. I understand all your points. It is harder to deal with things like breaks on your car, insurance, and mortgage. But you will do much better in life without them.

[COLOR="Red"After building my savings this year, I will strongly consider cutting these up for good. Again, thank you so much for your input[/COLOR]

[msomnipotent]

It was nothing for me to come home and find my MIL digging up MY flower garden to put in plants that she wanted. I found her once messing around straightening up OUR shared closet. When I complained to me ex, he just said he wasn't going to get between the two of us, which in reality meant she could do whatever she wanted and I had to shut up.

One of the things that you get to do as an adult, it to be an adult which means making decisions on your own whether your parents or in-laws like it or not.

The police would be digging my MIL up out of the dirt if I caught her doing that. Or, "If you are looking for the drugs, I hid them in YOUR closet." I'm lucky that my in-laws have little to do with us, and any bad interactions are due to my husband's miscommunication. We mainly just exchange pleasantries and stay out of each other's way.

If you get married to your boyfriend and the in-laws start pestering about when you will have a baby, say, "I'm surprised you want to talk about your son having sex. EWWWW." and chances are very good that not only will they never EVER bring it up again, but they just might avoid you for a while. Ask me how I know!

On a serious note, while you may be able to get a mortgage with no credit history, having a great credit score may mean the difference between a 4% mortgage rate and an 8% rate. Huge difference. So I wouldn't cut up the cards and never use them again. Set your utilities up to be charged every month, pay everything off, and use the points to buy something nice for yourself while enjoying low interest rates.

[Jluke]

[COLOR="Red"After building my savings this year, I will strongly consider cutting these up for good. Again, thank you so much for your input[/COLOR]

As msomnipotent said don’t cut up the cards.

Many of us on here use rewards credit cards for our everyday purchases to capture a few hundred or thousands in rewards cash back per year. All
for using a secure method of payment with many perks (if used correctly).

[Thrif-t]

Well good for you to reach out to people older and wiser than you for advise. That is how you learn!!

I've always been debt adverse so I'd want to knock those student loans out before I even thought about buying a house, getting married or having kids. It's so hard! And then to have student loans on top of all that, we couldn't of done it.

I'd build your emergency fund up to 5k, all the while paying as much as you can to those loans. When your loans are paid off you can ramp up your emergency fund more.

And I have a different perspective on credit cards. I think they are a great tool if used responsibly. Your credit score does matter! And having credit is a big part of developing a score. Your credit score goes into figuring out interest rates you pay on mortgages and car loans. Even your insurance rate takes your credit score into consideration to get a cheaper rate.

I'm not a big fan of debit cards because of how easy it is for someone to get a hold of your number and then what? Drain your bank account. Sure you can get it back, but it's a big hassle, and you could be bouncing checks left and right and racking up fee's. You won't have that with credit cards. I don't want anything tied back to my $$!!

Plus with credit cards you can earn rewards. There were lots of lean years where we used our rewards to be able to do extra's. Heck even now I've been saving them up and will cash them in next year for my son's graduation party. You just have to be responsible.

I teach my kids to only charge what they have money in their checking account to pay. Example, charge $20 of gas on Discover. They come home and pay that $20 charge on their discover account from their checking online right away. They never have a monthly charge balance this way, and they're learning to use credit responsibly and earn rewards/free $$ for doing it.

Everybody has their own ways of doing things so getting others opinions and learning new things is a great tool for life. The less debt you have the more choices you have in life. Good luck with your choices.

[MZKIMJACKSON]

As msomnipotent said don’t cut up the cards.

Many of us on here use rewards credit cards for our everyday purchases to capture a few hundred or thousands in rewards cash back per year. All
for using a secure method of payment with many perks (if used correctly).

I thought so, but it seems some people on here don't feel that way. Good to hear both sides. Thank you for your feedback.

[Thrif-t]

It's to my understanding that by contributing to a Roth, then I won't have to pay taxes on this income post retirement. Let me know if I should consider an alternate route. I'm definitely no expert when it comes to retirement and plan to contribute more to that post student loans when I can afford to make a higher contribution. I want to ensure I'm doing what's best long term

I say yes to the Roth, and when my kids start working and investing I'll advise them to do the same thing as well as get into a High Deductible Medical Plan so they can contribute to a HSA while they are still young and in good health, so it can built up for use in retirement!