Question

So I’m 20 y/o and have 0 bills as I’m still living with my parents, and have $15, 000 student debt. 1 @ $5, 000, 5% interest The other 10, 000, 7% interest I’ve been able to save $1, 000 for my small emergency fund. I have some money lying around as Im trying to figure out and work out my budgeting/financial planning strategies and wanted some advice on what to do with my money. I don’t know where to go from here. Should I just tackle my student debt as much as possible? Should I save in other ways? Should I invest? How? I’m really just stuck at the moment. Any advice is appreciated.  

Answer 1

I think it depends on how much you make. Can you tackle the student debt and invest?  

Answer 2

Pay your student loans off. They are high enough interests that you are going to lock in loses. What I mean is if your investments return 4 or 5% on 1000$ , but you have 10k at 7%, you are losing money.  

Comments

@demavend, agree. Knock that debt out first.  

Answer 3

Pay your loans! Take advantage of the opportunity your parents have given you. $15k is not a lot of you think about it. Work hard I’m sure it can be paid in 6 months the most  

Answer 4

If I had the opportunity to become student loan debt free at 20, I would have taken it and ran with it. I say this because I will be 36 next week and I still owe $4000 to my undergrad student loans (graduated from college in 2006) and another $19000 for my graduate student loans (graduated in 2011). Every time I think about those debts, I get annoyed and frustrated because I could have taken so many opportunities when I was younger to make sure I wasn't in that debt at my current age and I have a lot of regrets about it (not about my education, just about my poor money choices in my youth). So yeah, take care of those now if you can.  

Answer 5

Good for you, you have 1K saved up. Consider it your completion of Baby Step 1: Baby Emergency Fund. Now, use living at your folks place to your advantage. Since you don't have bills, you can quickly squash your debt and complete Baby Step 2. Pay it off as fast as you possibly can. Baby Step 3 is your fully funded emergency fund: 3-6 months living expenses. You'll see, with zero debt and a full load of emergency fund, the right mindset and careful financial planning AND youth in your arsenal, I can forsee you completing the baby steps early on. Good job so far.  

Answer 6

Since you have your emergency fund already, go all in towards the student loans. Then after that is paid off, start building your emergency fund to 3-6 months worth of expenses. If you want to buy a house, start saving a down payment. After that look into investing/retirement.  

Answer 7

Kill the loans.  

Answer 8

Tackle that student loan debt

Answer 9

Get rid of your student loan first. Take advantage of the fact that you don't have your own household bills. Take on a second job and then save, save, save after that debt is paid off. It shouldn't take you long.  

Answer 10

Do you work? If so I would regulate your regular costs if you pay for gas, cell phone, or anything else. Everything else I would pay off your student debt as fast as possible. Before moving out if at all possible, pick up a second job if you can or two. You dont have anything holding you back like kids so you can work your butt off for a yr or two and say it off. Your in a great position to not have any living debts so I'd take advantage of it by working your butt off to just get it paid off.  

Answer 11

From my experience, get rid of the student debt as fast as possible! I didn't have many bills after graduating (rent, taxi money, and grocery money) so all my excess pay went to loans monthly. I also made extra payments when possible. I'm so happy to not have that burden hanging over me! Good luck!  

Answer 12

First consider any big expenses that may be coming up soon. Do you have a job currently? If you have regular income, make a list of all monthly expenses vs income. I would pay off the debt before investing.  

Answer 13

If I could go back to your age and have zero bills and a small amount of debt. I would totally take advantage and tackle that debt as quick as possible, even if I had to work 2 jobs to pay it off in 6 months or less. Then I would take a trip to celebrate, come back and hardcore save to begin my adult life, debt free, with savings. I would make a plan, throw my parents a monthly amount to help out and practice.  

Answer 14

Very important equation left out. your income. Are you still a student? Are you working full or part time? I would throw every penny you make at those loans to be done with them before you have the expenses of living on your own.  

Answer 15

Definitely tackle the loans right now. I would suggest refinancing if you can because interest rates are really low right now. I just did and consolidated and my student loan interest went from 8% to 3. 88%