wwmmd?

cyndietb · March 2015

So DH & I have been saving like crazy the past couple months. I currently don't work at all because I've been in nursing school & finish in May. We have saved about a total of $7,000!!! Big deal for us especially w/ me not working.

Now we're not really agreeing with what to do with the savings. He wants to continue to save until I'm done with school and get a job, while I also like the idea of continuing to save but I'd love to be able to put money towards our massive school loan debt or save it for a down payment or a baby fund. The reason he wants to keep saving is because in case, god forbid, something happens in the next couple months we'll have enough money to fall back on. but i can't help but think that we could pay down 1 of my very large loans with a very high interest rate or completely pay off 1 if not 2 of our other student loans. Besides our student loan debt and car payments we don't have any cc debt. But we are hoping, once i finish school & get a job to get a house & start TTC within the next year hopefully. I just don't know if its better to have a decent savings or to pay down student loan debt.

WWMMD??

als1982 · March 2015

You'll get a variety of opinions here, and it all depends on your level of debt aversion.

If you're certain you'll be buying a house, I'd continue saving for a down payment. PMI is like throwing money in the trash, so wait until you have 20% to put down.

If you can hold off on buying a home, then I'd put it toward your student loans and car payments.

Either way, keep contributing to any employee sponsored retirement plans only up to whatever they'll match and fully fund your ROTHs. You can still contribute for 2014 through April.

Sisugal · March 2015

I would keep 1/2 in an emergency fund and 1/2 to high interest student loan debt and continue to doing that with your available money.

simplyelise · March 2015

How much do you guys have in SL debt and how much do you have in car debt and how much do you expect to take in monthly after you get an RN job?

I think my answer (before knowing the answers to those questions) would be to continue saving until you pass your boards and get your full time job. I'd steer completely away from putting that towards a down payment unless you absolutely cannot find a reasonable 2br rental in your area.

As far as your question, I think it's good to have a decent savings AND pay down (off) your car and student loan debt. So I'd encourage you guys to sit down and figure out how you can aggressively pay down loans and how long it will take you guys to be in a place where you're financially comfortable starting the home buying process.

kmurphy2131 · March 2015

This is a very personal thing and you will get mixed answers. David ramsey people will say all extra money should go towards loans once a $1000 (I could be wrong on that number) emergency fund is complete). Personally, I don't feel that way about my student loans. I would continue to save and make sure that I had 4-6 months of money in an emergency fund before I considered having a house down payment fund or pay extra towards loans. But that is just how I personally feel. For me, if we truly had an emergency we could fall back on savings. I could pay a huge chunk towards my loans right now and have early no e-fund (but get down with my loans faster) but if something happened and we both lost our jobs, I could put my loans in deferment and live off of savings. If we stop saving to pay off our loans, and we both lose our jobs, we have minimal savings and my loans would still have go into deferment. Kind of a controversial opinion I think, and I completely respect that others do not feel that way, but just my thoughts.

Xstatic3333 · March 2015

I would save until you have a job. Then, with home buying on the table, I'd keep enough for a three month e-fund. At that point, it's a philosophical choice whether you'd like to work on your DP or your debt first. We did a DP first and I dont regret it, but only because a "forever home" well within our budget was within reach pretty easily in our area. Others eliminate all debt first and swear by that approach.

wwmmd?

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