Student Loan Paydown or Save up?

**beks37** · 12-14-2009, 02:55 PM

I am pondering what my next goal for 2010 should be....

In 2009 we paid off the 401K loan and both car loans. We have no credit card debt or any other "bad" debts.

The only debts we have are the House and Dh's student loans. The student loans balance is listed in my signature (around 57K). Should I pay down on that? I could probably cut it down by $20,000 by following the same debt paydown plan as this year. Or, should I build up our savings to 8 or 12 months of expenses. That would be approx. $10,000 to go for 8 months of expenses.

Comments, opinions, and questions are appreciated!!

As a side note....I have a new "stable" job now, so I am not getting laid off as was previously. Dh's job is as stable as it can be in aircraft.....

**Greebo** · 12-14-2009, 03:28 PM

What's your annual income, net?

**JoJoBean8** · 12-14-2009, 03:53 PM

Student loan debt is the only debt we have left and we are paying it off and saving at the same time. Why not split it? You paid 20,000 in one year so if you can do the same this up coming year you can put that 10,000 towards your emergency fund and the rest towards student loans.

**beks37** · 12-14-2009, 04:46 PM

Annual net income is roughly $70,000. It may go up or down by 1K after I get health insurance switched around. I just started my new job Dec 7th...

**Greebo** · 12-14-2009, 05:57 PM

With the student loan debt as large as it is, I would go for the FFEF first, then student loans, then mortgage.

**itlw8** · 12-18-2009, 10:45 AM

glad to know I agree with an expert!

savings and then loans... I assume you have a good rate on the student loans anyway right?

You just never know what will happen you might get sick injured.

Though the math does not make sence to me You make 70 you paid off 20 last year so you only live on 50 yet 10 is 8 months expenses ?

If you only have that little expenses you need to find the hole.

**itlw8** · 12-18-2009, 10:48 AM

Wanted to say you guys are doing great I wish I had Gotten it when I was in my 20's and early 30's If I had saved more then just think what we would have now. hmmm.

**littleplum** · 12-18-2009, 09:05 PM

Originally Posted by itlw8

glad to know I agree with an expert!

savings and then loans... I assume you have a good rate on the student loans anyway right?

You just never know what will happen you might get sick injured.

Though the math does not make sence to me You make 70 you paid off 20 last year so you only live on 50 yet 10 is 8 months expenses ?

If you only have that little expenses you need to find the hole.

Three things come to mind immediately:

1. She just started this job, and it might be more income this year
2. 70K after the tax man's share is about 55K.
3. She said that they need to save $10K MORE to get to 8 months expenses.

**Luckybustert** · 12-19-2009, 04:24 PM

Ugh...I also have 50k+ student loans to pay back...this is the part the school finance counselors don't explain so well. When I started paying back my loans, it was $700/month...I don't know how people who are on an entry level salary do it. I'm not entry level and I still found it hard. Have since consolidated them to give me a little breathing room. In 2010 am focusing on building the emergency fun, paying off the credit card debt, then once that's done planning to focus on student loans and mortgage.