Where to put extra money?

Question

I just finished my Master's degree and for the first time in my life I have a decent salary. I'm paying education loans, I'm putting 10% of my take-home salary toward a pension, and I am saving $500 per month. I am 28 and this is the first time in my life that I've had a retirement plan and have started saving, so I feel a bit behind. I still have a good amount of spending money because my rent is only $500 per month. Where should I put an extra $200 per month - toward education loans (which will take me 10-15 years to pay off at this rate - 6% interest), toward my retirment or toward savings? Or other suggestions? Should I just spend it and live a little? I haven't bought nice clothes in ages.

Answer 1

Since you are already saving 500 a month, then I would try to pay down on the student loans. That is what I try to do with my extra money. Or you can set 100 of it aside for fun money.

Answer 2

take a quarter ($50) to spend on yourself for fun and put the rest toward your most expensive debt. If the 6% on your student loans is the most expensive debt, then set to paying it off sooner. Many people have credit card debt from the College Years...if you're one of us :) and the rates on that debt are greater than 6% then pay them off sooner.

You might also consider becoming a home owner. But if the rental situation is working for you (hey, $500 a month, sweet!) then keep with it. Look into it though, because a primary home can still be a good investment.

Way to go!

Answer 3

Consider yourself "extremely" lucky.
If you need a new suit or two then buy them (sturdy, long life but inexpensive clothes)...and then put away three months of your salary (for emergencies, in case you are out of work...emergencies like rent, utilities, food, car payment, car insurance, etc.). I don't know what your educational contract says about prepayment so put into a special savings account (that you won't touch) additional monthly payments toward your schooling debt. If by chance you're out of work they will expect that monthly payments still be made to them.

The reason you should pay your schooling "before" you save for retirement is that if you fall behind in school payments they can dunn your retirement funds.

I think in a Roth IRA you have to make $1,000 payments per year.

Answer 4

Here's the deal.
technically u should have atleast 4 mnths salary in your savings a/c for all emergencies that come up in your life and after you have done so you should think of putting money in mutual funds... But don't procastinate on paying back your Student/ education loan.. it can cost you dearly . So make your mnthly payments for the loan.. and put rest of the money in your savings a/c.. and after u have 3-4 mnth salary in ur a/c you can think of spending on anything else..
it wud be hard initially ..but you'll be glad you did it after 5yrs from now.
:0)

Answer 5

try to manage your money well,...put the 50% of your money toward your retirement then,...have the other 30% to your savings and 20% for your self...
That was only my idea....

Answer 6

The quicker you pay off loans and debt, the better it is in the long run.

Answer 7

Do in the way that u think it is gd and right and beneficial for u. U should get satisfaction through it though.

Answer 8

suggest a hedge fund or bond that you can drip feed, high interest off shore account, under the bed,

Answer 9

Go and get some decent cloths and then decide later.. :o)

Answer 10

you could be real nice and deposit it in my checking account