Graduating soon...how much to keep in savings.

[toekramp]

Alright, I'll be finished with school in a few weeks and landed a job doing some database integration. Unfortunately I've had to take out some major loans in order to pay for out-of-state schooling and have compiled nearly 50,000 in debt. The monthly payments will be close to 500 dollars and have a 4.5% APR. I know I should pay off the loans as quickly as possible, but how much should I keep in savings. Is putting 1000 into savings and then paying off as much as I can a smart idea? Or should I divide the income more evenly. It just seems that having a savings account when I have so much debt kind of defeats the purpose. I'm new to all of this and would like some veteran help Thanks in advance.

 

[Zim Hosein]

Having the savings account will help if you need cash for an emergency

 

[EvilYoda]

It kind of depends on your style of living...for instance, I'll start a school year with 3-4K in the bank, and be broke by Feb/March, but then I'll have made some money here and there, so I'll hopefully have a thousand at the end of the school year. And then the cycle begins all over again.

Granted, this summer I don't have a g/f to spend all my money on, so that could change things. ("change things" reads: new computer, TV, rear and center speakers, car.)

 

[notfred]

You make me feel good that I only owe about $15k.

 

[toekramp]

Originally posted by: notfred
You make me feel good that I only owe about $15k.

glad it makes somebody happy my friend @ wake forest is looking @ 120k in debt.

 

[Noirish]

Unless you are certain you can pay it off quickly, there is no point in paying more than your monthly payment.
You can save up all those unused fund and once you've reached your principle then you can pay it all off at once.

 

[Noirish]

Originally posted by: toekramp

Originally posted by: notfred
You make me feel good that I only owe about $15k.

glad it makes somebody happy my friend @ wake forest is looking @ 120k in debt.

uh?
medical school? or law?
if not, it's hella expensive.

 

[toekramp]

Originally posted by: orangel
Unless you are certain you can pay it off quickly, there is no point in paying more than your monthly payment.
You can save up all those unused fund and once you've reached your principle then you can pay it all off at once.

but won't the interest on my loans grow more quickly the my interest in my savings...

 

[toekramp]

Originally posted by: orangel


uh?
medical school? or law?
if not, it's hella expensive.

pre-med

 

[KEV1N]

Database integration is hard!

 

[Mallow]

I just graduated debt free! yippie!

 

[toekramp]

Originally posted by: Mallow
I just graduated debt free! yippie!

congrats...bastard

 

[UnatcoAgent]

Originally posted by: toekramp
Alright, I'll be finished with school in a few weeks and landed a job doing some database integration. Unfortunately I've had to take out some major loans in order to pay for out-of-state schooling and have compiled nearly 50,000 in debt. The monthly payments will be close to 500 dollars and have a 4.5% APR. I know I should pay off the loans as quickly as possible, but how much should I keep in savings. Is putting 1000 into savings and then paying off as much as I can a smart idea? Or should I divide the income more evenly. It just seems that having a savings account when I have so much debt kind of defeats the purpose. I'm new to all of this and would like some veteran help Thanks in advance.

I hope all works out for you, but like notfred said, you make me feel better.

 

[Hector13]

Originally posted by: orangel
Unless you are certain you can pay it off quickly, there is no point in paying more than your monthly payment.
You can save up all those unused fund and once you've reached your principle then you can pay it all off at once.

huh? I don't think that is right at all. Unless your savings are paying more than 4.5% (if they are tell me where!!!), you should put all your "excess" money into paying off your debt.

Of course you need to keep some money in savings (or another liquid account) just in case, but no more than that.