Savings or Payoff Debt
OK folks I need some help with a financial decision. I am currently working full time and going to school for my masters in counseling. Once I finish in December 2018, I plan to leave my current well paying job and starting my intern hours. I will probably make about 45K a year during that time (about a 1/4 of my current income). In order to make it through the lean years, I am working to save as much money as I can. I have managed to sock away 25K (the most I've ever managed to save), but I have a couple of debts which require a pretty significant payment each month.
I come from a cash poor family with few money management skills. Having this money in my savings makes me feel secure which is why I get nervous about spending a large chunk, but I have a feeling that's not the best strategy.
School Tuition: $12,500 Medical loan: $6200 Savings: $25,000
Option 1: Keep following my current payment plan (about $650 a month) and keep saving whatever I can
Option 2: Pay these debts off now which reduces the debt and monthly payments, but obviously makes a big dent in my savings. If I follow this approach I would just put the extra $650 into my savings each month.
Option 3: Pay the larger debt only and keep the medical loan which costs me $175 a month and put the difference into savings each month.
I look forward to your advice.
Posted Aug 17, 2017, 7:58 PM UTC