(Closed) Pay off debt or keep money in savings?

posted 7 years ago in Money
  • poll: What would you do?
    Option 1 : (27 votes)
    36 %
    Option 2 : (2 votes)
    3 %
    Option 3 : (46 votes)
    61 %
  • Post # 18
    Member
    123 posts
    Blushing bee
    • Wedding: January 2015

    First- what kind of savings are you talking about?  Don’t empty your retirement accounts to pay off school loans.

    You can probably pay off that debt very quickly, and still keep an emergency/rainy day fund.

    1. Figure out bare-bones expenses for a normal month(rent/mortgage, food, monthly bills)

    2. If both of you are working jobs with consistent paychecks, throw all of the 30k minus 3 months of expenses onto your debt.  If only one of you is working (or one of you has varying paychecks) save 6 months.  

    3. Try to live as close to that bare-bones budget as possible for the next few months and throw as much as you can on the debt to get rid of it.  

    One way to speed off paying this is to “borrow” money from other debt repayment, if you have it.  Credit cards that you’re paying on?  Furniture loans?  Until the school loans are gone, make only the minimum payments on those bills so you have even more to put on your school loan.  

     

    Post # 19
    Member
    2871 posts
    Sugar bee
    • Wedding: May 2015

    @MissGeeBee:  I’d keep at least a 6 month emergency fund stashed away, then pay the rest to debt. That six month fund is critical for medical or auto emergencies or job loss. 

    Post # 20
    Member
    5658 posts
    Bee Keeper
    • Wedding: August 2012

    I would definitely not cash out 100% of your savings to pay off the debt. But if you’re paying interest on the loans you should definitely pay a big chunk and then make it a point to pay the rest off before you put anything else in savings. Leave yourself an emergency cushion though 

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