Is paying $3,200 monthly in student loans sufficient or should I pay more?

[PharmacistFl12]

Just curious, I don't want to feel like i'm slacking and not paying enough towards student loans. Do you guys think paying $3,200 a month towards total student loans of $147,000 at 4.85% interest is good enough? I want to put $1,000 towards investment (mainly stocks). I know that $1,000 can go towards my student loans but I don't feel comfortable going all out towards my loans and not having any money to fallback on in case of emergency.

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[deleted480308]

Just curious, I don't want to feel like i'm slacking and not paying enough towards student loans. Do you guys think paying $3,200 a month towards total student loans of $147,000 at 4.85% interest is good enough? I want to put $1,000 towards investment (mainly stocks). I know that $1,000 can go towards my student loans but I don't feel comfortable going all out towards my loans and not having any money to fallback on in case of emergency.

Stocks aren’t a good emergency fund. In general I suggest a dave ramsey style babysteps.

1) reduce your spending
2) get an emergency fund of $1000
3) start throwing all the extra money at loans/debtd

******for someone like you with a little more risk aversion, do your 3200/1000 plan until you have 3 months of expenses (not income) in savings/emergency. Then move to a 4200 debt payment until the loans are gone. You can chew through this

 

[Charcoales]

I agree with above, but remember once u put ur money into loan u cannot get it back, so if u are long term unemployed u r screwed out of long term emergency fund. BUT if u are federal loan, u can always ibr though if u lose job for long time. Ur interest is pretty low (sub 5%), stock market is like 7% return so might be better use of ur money to be honest...

 

[gwarm01]

I agree with above, but remember once u put ur money into loan u cannot get it back, so if u are long term unemployed u r screwed out of long term emergency fund. BUT if u are federal loan, u can always ibr though if u lose job for long time. Ur interest is pretty low (sub 5%), stock market is like 7% return so might be better use of ur money to be honest...

Stock market averages 7% return, but years like 2017 are well over 20%. You really need to weigh the pros and cons of paying the loans vs missing out on investments.

 

[DokterMom]

Stock market averages 7% return, but years like 2017 are well over 20%. You really need to weigh the pros and cons of paying the loans vs missing out on investments.

Stock market is pretty high right now, so you're "buying high". If you have to get your cash back out, you may well have to "sell lower" --

 

[Amphetamine Salts]

save at least 10k asap and put it in a separate bank account, this is your emergency fund. re finance to lowest interest rate and pay the minimum required to pay off loans in 10 years. rest of the money use for survival + entertainment, food, stupid stuff, etc, or if you are responsible put it towards loans. bonus: put ~$500/month toward saving for vacations and investments

 

[gwarm01]

Stock market is pretty high right now, so you're "buying high". If you have to get your cash back out, you may well have to "sell lower" --

The saying is that time in the market beats timing the market. People have predicted the top of the market for years now, yet we are still seeing great growth. The bubble could burst tomorrow or we could see another year with >20% growth of the S&P 500. That 7% figure is an average which includes the boom years and the bad ones.

Now, absolutely have an emergency fund with cash. Put money in a savings account if you are planning on a purchase in the next few years. But long term, you are going to be kicking yourself if you don't invest.