Junior in College- Advice please

**sweeps** · 04-05-2007, 03:15 AM

What is the balance on your car loan? At 7% it needs to be paid off.

**disneysteve** · 04-05-2007, 06:41 AM

Wow! I think you are in great shape, especially at your age.

I agree with Sweeps that you should get rid of the car loan. That shouldn't be too tough if you have an additional $300-500 to use towards that. You could also tap part of your EF, maybe $1,000, toward the debt and then replenish it over a few months.

I'm curious what type of work you are doing that you earn $30,000 while in college.

**fiffer010** · 04-05-2007, 06:55 AM

Thanks for the advice...I'll be sure to start applying my extra cash to the car once I finish with the 2007 Roth Payment(I look at contributions not as saving but rather a bill/payment I need to make).

Steve to answer your question, I am Tier 2 Tech Support Representative for a Microsoft Exchange Hosting company (The Message Center Exchange Hosting)

**anonymous_saver** · 04-05-2007, 07:07 AM

How much money do you have left on your car loan? How long will paying an extra $300-$500 a month take you? After you have your car paid off, I would split the extra money towards more of an emergency fund (maybe up to 6-8 months worth) and a down payment account. You could just open a sub account with ING if you'd like - and label it as "down payment".

Do you have a 401(k) through your job? Are you contributing?

Are you taking out any school loans for school?

Congratulations on your finances, it sounds like you are doing great!

By the way, I would think of opening an account with Emigrant or another online bank if you wanted to earn a bit more interest than ING. ING is good, don't get me wrong, but there are better interest rates out there.

**disneysteve** · 04-05-2007, 07:16 AM

Originally posted by anonymous_saver View Post

By the way, I would think of opening an account with Emigrant or another online bank if you wanted to earn a bit more interest than ING. ING is good, don't get me wrong, but there are better interest rates out there.

OP has ING checking, not savings. 4% on checking is quite good.

**fiffer010** · 04-05-2007, 07:24 AM

I have about $12,000 left on the car loan. Currently my job does not offer a 401K but ive been told the ETA for that towards the end of the year. I don’t need loans for school, my parents are paying for my Bachelors tough if I go to grad school I’m not quite sure how that is gong to work.

The reason I use ING is because they have a great interface for their site and they offer 4% for their checking, where as I was getting nothing for BofA.

**anonymous_saver** · 04-05-2007, 07:26 AM

"3 month emergency fund at ING direct- $3,000- earning 4.5%
Checking at ING direct -$1,800- earning 4%"

She has both.

**disneysteve** · 04-05-2007, 07:53 AM

Originally posted by anonymous_saver View Post

"3 month emergency fund at ING direct- $3,000- earning 4.5%
Checking at ING direct -$1,800- earning 4%"

She has both.

My mistake. I missed that part. Sorry.

**PetMom** · 04-05-2007, 09:05 AM

That is great you are able to have a good paying job, are
saving and do not have to pay for college. You will definitely
be starting out ahead in life.

College loans can absolutely be awful for people going for
extended years (anything with a Masters) or those going
to the private big name colleges. I have known one
graduate with the two above facts who graduated and
is still paying a $90,000.00 debt. He has not even
been able to think of home ownership.

If you do go to graduate school one technique I have known
some people to use is to take a much lighter load (if possible
obviously with medical school not an option) and just extend
the years paying as you go or incurring as little debt as possible.
Eg... 4 years for a Masters as opposed to the typical 2 years.

Scholarships are also an option (research this carefully though).

Staying out of huge school debt and building work experience
are the best things for college age people and you have taken
that further by actually saving.

**fiffer010** · 04-05-2007, 09:43 AM

Originally posted by anonymous_saver View Post

"3 month emergency fund at ING direct- $3,000- earning 4.5%
Checking at ING direct -$1,800- earning 4%"

She has both.

HE has both

**Homebody** · 04-05-2007, 04:30 PM

I think you are doing great. I think I would bulk up my savings a bit more before starting to pay off the car at an accellerated rate, but that is just me.

**SavedintheCity** · 04-06-2007, 02:02 PM

Yeah I'm with the other folks. car loan. get rid of it. If you put an extra $300 per month on the car loan you could pay it off in ~20 months. Think of it, less than two years and the car is yours. Obviously at a cost of putting that 300/month in the savings at 4.5%. Of course paying off a credit at 7% with money that would otherwise be earning 4.5% will be earning you an immediate 2.5% risk free return.

Otherwise you are in outstanding financial condition for your age. I wish I were in your position at my age! Kudos, keep at it. Only great things I see in your future.

**PharmacistRealtor** · 05-31-2007, 03:51 AM

buy a house with roommates that pay your mortgage...great job...it took me ten years to get back to where you are...

**zetta** · 05-31-2007, 02:41 PM

Originally posted by PharmacistRealtor View Post

buy a house with roommates that pay your mortgage...great job...it took me ten years to get back to where you are...

Neat idea...although I would consider how long you are going to be in your current city. If you are likely to relocate after graduation, it might be prudent to wait, then buy a starter house and find roommates in your new city.

After funding the ROTH and paying off the car loan, I would suggest that you start investing $50 or $100 per month in a no-load index mutual fund. Investing regularly is another great habit to get into.

As for grad school, take a hard look at the pros and cons, both financial and intangible. Not sure what you are studying, but if it is software engineering you can get good jobs with just a BS. Getting a PhD changes the type of work that you do, but doesn't impact the salary enough to make up for the opportunity costs associated with being in school for another 4-6 years. On the other hand, if you feel very passionately about a field, you might regret not going on to the PhD level. For the chemical and biological sciences, often a PhD plus postdoc is the entry-level requirement to do any sort of interesting and lucrative work.

Junior in College- Advice please