I've acquired some savings. What should I do with it?

[Megalo]

I've poked and prodded at these forums for a while, so I know what you need from me.

By the way, It would have been so much easier if I could have posted a google doc spreadsheet.

Current yearly budget plan:
360/week avg = 1440 monthly
Saving 84/week = 336 monthly
200 rent
310 student loans
200 gas
32 car insurance
75 cell phone
160 food
60 fast food
25 gamefly
20 gym
1082 Total

Student loan info
23600 Borrowed
22632 Owe
551 Interest paid
2331 Total Paid

Student Loans are my only debt. Interest rates on them vary between 3.15% and 6.3%. Should I drop a bunch of my money into them? So far I've pain about $550 in interest.

I have no retirement savings or plan. I wouldn't know where to start in that regard or if now is a good time to start.

My current temp employment will only last till Nov. 22. Hopefully it will end a lot sooner than that as I'm currently throwing my talents and degrees away at this job.

Here's a story. My brother defaulted on his student loans. He's going back to school so his federal loans are being deferred. His private loans have been consolidated by a collection agency and placed into an account at .01% interest so he can save money and pay a lump sum far lower than what he actually owes, possibly less than what he even borrowed. I know of similar deals with credit card debt, but they hadn't even defaulted or stopped making payments. What if... you know... I did something like that?

What should I do?

[phantom]

Student loan info
23600 Borrowed
22632 Owe
551 Interest paid
2331 Total Paid

These numbers don't add up. It should be Amount Borrowed + Interest Paid - Total Paid = Amount Owed. All that really matters is how much you still owe. But, I do wonder exactly where these numbers are coming from because something isn't right.

Here's a story. My brother defaulted on his student loans. He's going back to school so his federal loans are being deferred. His private loans have been consolidated by a collection agency and placed into an account at .01% interest so he can save money and pay a lump sum far lower than what he actually owes, possibly less than what he even borrowed. I know of similar deals with credit card debt, but they hadn't even defaulted or stopped making payments. What if... you know... I did something like that?

I'll be somewhat surprised if your brother manages to pay less than what he actually borrowed. Student loans are not dismissed in bankruptcy, so that makes it difficult to convince any one to accept less than what is owed on them. Admittedly, I am not an expert on the ins and outs of trying to avoid paying back what you borrowed. But, in general, it is usually difficult to do, and it is morally questionable. So, I would not suggest heading down that path unless you have no other options, and since you are making enough money to make your minimum payments and then some, you definitely have other options.

The first thing I would do is to build up an emergency fund. Artwest's suggestion of $2000-3000 sounds reasonable. I also agree that it makes sense to wait until you have a permanent job to throw any extra money on your student loans. That way, it it's harder than you expect to find a job that does make better use of your education, you're prepared.

Once you find a permanent job in your field, you can start worrying about paying off your student loans early and saving for retirement. Things like whether or not your permanent job offers a 401k and how much it pays will impact how you want to balance retirement savings and debt repayment.

[Megalo]

These numbers don't add up. It should be Amount Borrowed + Interest Paid - Total Paid = Amount Owed. All that really matters is how much you still owe. But, I do wonder exactly where these numbers are coming from because something isn't right.

The ammount borrowed is exactly what I borrowed in total for the loans. However, I had some unsubsidized loans that accrued intrest while I was attending school and that interest was capitalized when the deferment periond ended. That's why those numbers don't make any sense.

[phantom]

The ammount borrowed is exactly what I borrowed in total for the loans. However, I had some unsubsidized loans that accrued intrest while I was attending school and that interest was capitalized when the deferment periond ended. That's why those numbers don't make any sense.

Thanks for clearing that up. Technically, I'd probably count the interest that accrued while you were in school with the interest paid, or maybe with the initial balance. But, however you like to think of it is fine. Like I said, the most important number at this point is what's left.

[Gailete]

What if... you know... I did something like that?

A resounding NO! You have no reason to do so as you are handling your debt at this point. Trying to avoid your loans is unethical as far as I'm concerned. Trying to leapfrog your way to wealth by not paying what you promised is not a good solution, especially since many of us here undoubtedly paid off our student loans no matter how much it hurt financially.

If this is just a temp job, what are you doing towards getting a permanent one that will use your training and talents. Unless you have something lined up when the temp job is over, it can leave you penniless real fast.