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re: Paying Down Debt Vs Saving
Posted on 2/7/16 at 7:54 pm to Powerman
Posted on 2/7/16 at 7:54 pm to Powerman
i think everyone has great ideas. My mindset is I personally don't want to owe anyone anything it makes me feel less free. Even if it's not the right "play". I have a stable career but its sales and you never know What may happen
This post was edited on 2/7/16 at 7:56 pm
Posted on 2/7/16 at 9:50 pm to Powerman
quote:
Also, on the student loans I'm on one of their repayment plans that states after 2033 I may be able to have them forgive the remaining balance.
Is it income based repayment? If so, some people are planning on retiring early so they don't have to make payments for the last few years.
Posted on 2/8/16 at 1:17 am to gobuxgo5
What is the company match ? If there is one
Posted on 2/8/16 at 8:39 am to saderade
I put in 6% to get an extra 3%
Posted on 2/8/16 at 8:56 am to gobuxgo5
I second what a lot of other posters have stated. Put in the 6% - never pass up "free" money - and then go after the debt. Look to refinance with Sofi at a lower rate if losing the tax deduction doesn't materially affect you. After that, try to find an extra $100 each month to throw at the debt. Maybe its cutting back on cable, eating out less, cleaning your own car, etc.
Posted on 2/8/16 at 9:08 am to gobuxgo5
quote:
I put in 6% to get an extra 3%
So your reasoning is flawed. If you pull out of the 401k because you are "losing" money in it, you aren't taking into account that by contributing to it you are guaranteeing a 50% gain.
Assuming you are making more than 50K/year, which I hope you would given your student debt, then I would just stay in the 401k and live frugally until you knock out the student debt.
Posted on 2/8/16 at 9:23 am to GeauxPack81
Very true. I wasn't thinking about company match and how extra that was on initial post.
This post was edited on 2/8/16 at 9:24 am
Posted on 2/8/16 at 11:09 am to gobuxgo5
Im in the same situation as you OP. I have $65k in student loan debt at 6% with sofi. All of my wife's loan debt is paid off. My company does a 401k match at 6%/3%. Ive looked into the stopping 401k contributions but decided to only contribute the minimum to get the match.
My truck will be paid off by the end of the year. I will then put that payment amount towards the student loans.
I have 3 months of expenses saved for emergency
There isn't much more one can do besides let time and payments roll on. With this amount, it sucks because you feel that you can never pay enough extra to make a dent
My truck will be paid off by the end of the year. I will then put that payment amount towards the student loans.
I have 3 months of expenses saved for emergency
There isn't much more one can do besides let time and payments roll on. With this amount, it sucks because you feel that you can never pay enough extra to make a dent
This post was edited on 2/8/16 at 11:36 am
Posted on 2/8/16 at 11:18 am to Ace Midnight
quote:
That's Ramsey's "Baby Step 3"
Step 1 is $1000 emergency fund
Step 2 is pay off all debt, except your mortgage
Step 3 is 3 to 6 months of expenses
Step 4 is 15% of gross pay for retirement
Step 5 is save for children's education
Step 6 is pay off the mortgage early
Step 7 is invest and give
I believe you have Steps 2 & 3 out of order.
Posted on 2/8/16 at 12:05 pm to Dan Bilzerian
quote:
I believe you have Steps 2 & 3 out of order.
He does.
Can we just add these threads to the sticky already? I feel like we have this exact discussion on a weekly basis on the MTB.
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