Post # 1
Just curious. My FI has some significant debt from grad school, I don’t know exactly how much but I’m guessing ~40k. We both make around the same amt, within a couple thousand (I make a tiny bit more). I don’t have any debt at all. We don’t own a house and aren’t thinking about making a house purchase anytime soon (tiny fixer uppers in our area are around 800k).
I was thinking about starting to put some of my money towards his debt so we pay it off sooner and with less interest.
Rent and living expenses where I live is extremely $$$, so any little I have left over has been going towards safety net savings and my 401k. Currently because of the living expenses and debt, my FI is not really saving any money or putting any into a retirement acct.
Should I continue to put it in our joint emergency savings/retirement or help pay off the debt?
I just feel like we are losing money by not paying it off sooner. My retirement account has excellent return rate (almost 16 percent) but we obviously can’t tap it til age 65.
Post # 3
I will be. We’re waiting to combine once we’re married, but once we combine, we will have 70k of my fiance’s debt. I would keep saving (personally) in your emergency fund, and contribute when you combine (if that’s your plan) after you marry. I would still wait until we were legally married even if we didn’t plan on combining.
Post # 4
I will be contributing to his student loan debt as if it were my own (I dont have any)
Post # 5
It would be very generous of you, but do not feel as if it was an obligation. I have around 15K in student debts and Fi just went back to college at age 36 to get a bachelor. So he’ll start having debts, while he didn’t a few months ago. I won’t be paying for his debt and he won’t pay for mine. But we help each other as we can. My mother has a good salary and my father is paid close to minimum wage, no retirement or savings related to that. It’s been 30 years my mom pays both her share and his into their common retirement savings. It was a decision they made together because my dad simply couldn’t afford it, even if he’s a very hard-working man.
Post # 6
@rawrrawr: I’d keep saving. If he can’t save one of you should. Your money is better off earning interest then it is paying student loans off a little faster . I know they’re daunting I have $60k left myself but I think it’s important to ace rather than pay off faster, at least for us.
Post # 7
I’m paying my own student debt – DH doesn’t have any debt. He pays more toward bills and mortgage (he makes more more money too) so I can make my payments.
Post # 8
We both have some, but mine is a lot less, and I’ll be helping him pay it off. I wouldn’t sacrifice having emergency funds to do so, but I see it as helping us both financially since he’ll be paying less interest in the long run, and either of us having more money to spare benefits both of us.
Post # 9
We don’t have any debt from undergrad but FI (then DH) will be paying for my grad school whatever isn’t covered. I think after you’re married and combine finances you could put more towards the loans.
Post # 10
I am the only one who pays towards my loans (between $750-$900/month), but DH picks up the extra stuff elsewhere. He pays for some of the extra bills and gas.
Post # 11
Our money is OUR money it is 100% combined, so yes in theory both our money pays my school debt, but we think of it as our money paying off my school debt that resulted in me getting the job that provides 2/3rds of our income!
Post # 12
@rawrrawr: We each paid our own. They’re done now.
I would suggest finding out what the interest rate is on his student loan, and also what interest you are earning by saving. I think having some savings set aside just in case is a good idea, but if he’s paying out the nose in interest it might be wise to help him.
You could also put some towards savings, and some towards his loan. Then you won’t be totally cash strapped in case you need money, but you can still help him pay his down.
Also, this isn’t really related but can you increase the frequency of his payments (say, from monthly to biweekly)? It helps pay it down much faster.
Post # 13
@rawrrawr: Yes. We just use “our” money to pay every bill, including my student loan from going to law school. We just look at it as another bill.
Post # 14
FH and I have talked about how we are going to handle my student loan debt because I’m the only one that has any. Mine is not a huge amount, only $15,000, so I said that I would be in charge of those payments. It’s not a big deal. After we get married, if FH wants to help out he can, but unless he actually says “SouthernGirl, I want to help you pay for your student loans” I’ll be taking care of that expense.
Post # 15
@rawrrawr: Ah, the age ol’ question of savings vs. paying down debt. It really comes down to a matter of how risk-aversive you and your FI are, e.g., Would you be more comfortable knowing that you have a nice little nest egg to fall back on? Also, there are amortization calculators out there were you can calculate how much interest you’d be paying if you contributed $X vs. $Y. That might be helpful for you to decide whether it’s really worth paying extra in the long run.
Also, a majority of the advice I’ve gotten recommended that you save until you have $ to cover at least 2-3 months’ worth of expenses (some say up to 6 months) before you start contributing extra towards loans, savings, investments, etc.
Lastly, I’m the one with student loans in our relationship but I’m not going to have my FI contribute anything, even though all our bills are split equally between us. I kind of like knowing that I managed to do it all on my own. But that’s just me 🙂
Post # 16
Yes techinally, I had a little student debt left and Fi just told me to take money I would have put in the wedding fund along with a large cash gift my Dad gave me. He end up paying for about 70 percent of our wedding so I could afford to pay it off.
I think student debt affects so many aspects of things you guys will do as a couple like buying a house, that it may be well worth it for you to contribute.