OK so currently I have about $10K saved up. I am also expecting a $35K inheritance check within the next year. In addition, I have about $34.5K currently outstanding in student loans which I will be paying at about 6.5%. My question is whether I should use that inheritance money to pay off the student loans all at once immediately or should I keep that money and do something else with it (invest etc..)?
2007-12-27 16:20:31 · 3 answers · asked by Patrick H 3 in Business & Finance ➔ Personal Finance
This is a standard question in finance: Best bet, pay off any and all debts as quickly as you can. Not only will it give you peace of mind, it will relieve you of headaches (did I pay it this month? Oops, I spent the money on a good time, how will I pay my bills? etc.) but will give you a better credit rating.
And, in real life, people seldom receive as much as 6.5% on what they save. A few claim it, but I don't see it, except for a rare occasion.
So, don't gamble with your future; pay off debts, save money, THEN have fun.
2007-12-27 16:30:35 · answer #1 · answered by Nothingusefullearnedinschool 7 · 1⤊ 0⤋
Invest the money in a low-risk option, such as diversified mutual funds or bank CDs. I recommend against paying off the student loan as the 6.5% is a good rate. Take no more than a few thousand and travel overseas..
2007-12-27 16:24:49 · answer #2 · answered by Anonymous · 0⤊ 1⤋
Pay off your debt and be DEBT FREE. Don't count on that check though until it's in your hand. I also recommend reading Dave Ramsey's book "Total Money Makeover" [get it from the library for free, buy it for someone after you are debt free, if you want to buy]
2007-12-27 18:23:03 · answer #3 · answered by Jaclyn&Dave 5 · 0⤊ 0⤋