MemberI totally forgot that I used my tax return to pay off 2500 of my personal debt and now only have 2500 left! Woo!
So after all your advice, I’m thinking I’ll pay off the additional 2500, then save 2500, then use 15k to cut my loans in half.
Thanks, Bees!
Member
MemberUse it to add value into my current house as we’re planning to sell in the next six months or I might use it towards the new house for any upgrades I might want to do. But to be fair, we don’t have any debt or student loans nor do we have any understanding of investing.
If you have debt/student loans then I would probably pay those off.
MemberYou should check into whether you qualify for loan forgiveness before you pay any extra. Any 501c employer, some rural areas, and districts that meet other critera will entitle you to apply to have the balance of your student loans paid off at the end of 10 years of qualifying payments. You have to be on an IBR – which you already are – and have your employer certify your eligibility, but it’s a super simple process.
If you qualify, I would pay off your personal debt, save $5k spend $5k and put the rest in an interest bearing savings acccount, from which you set up auto withdrawal. The account with that much in it will earn you a bit of money, and your student loans are handled automatically.
It can actually improve your credit to have longstanding loans which are paid on time. Paying them off entirely might reduce your average length of credit history, and counter-intuitively harm your score.
Obviously, you know your situation best, and if you have accounts that are older this might not impact you, but it’s an option worth exploring. Having the balance of your loans forgiven, even if they are accrucing slightly higher interest, will still end up with you paying out less in the long run.
Member
HostessPay off personal debt, as I’m guessing that has the highest interest rate. So 5k there. Then I’d put 10k towards your student loans, as I’m assuming the interest rate is relatively low <5%. Then I’d put 5k in savings for emergencies.
MemberPLEASE talk to a financial advisor. The bees are great and love to help, but we do not know your specific details and most of us are not trained/educated in this area. Personal finance is tricky – I would hate to see you accidentally screw yourself out of a few thousand bucks just because you didn’t understand the ramifications of your options.
MemberMemberGood luck, and congrats!!
MemberPay off debt in decreasing order of interest. For me that would be personal debt, followed by mortgage.
But I’d reserve at least a portion for rainy day/emergency funds.
MemberI’d pay off my personal debt first, then put the rest in savings towards a house deposit.
Student loans in the UK work a bit differently though, and as much as it’d be nice to get rid of mine, the money would be better served as a deposit.
MemberI’d pay off personal debt and school loans with most of the money, starting with highest interest first. I’d leave $1000 to play with and splurge on something. Because all work and no play makes Jack a dull boy.
MemberI would use 15k to pay of the highest interest debt, the take a amazing vacation with $5k
MemberProbably pay for IVF. Lol but if that wasn’t a problem for me I would use it to pay down some debt and maybe go on a vacation too.
MemberI would pay the most toward the debt that would benefit the most and use the remainder in a manner that would honor her–travel, jewelry, …