Hi PF, after reading many threads for the past two years I have learned a lot. Thanks in advance!
Using the income prioritization flow chart I know step one is to bolster up my emergency fund, which I am currently in the process of. Step two is to contribute to company 401K, which I am not eligible for yet but I will contribute to get the 3% match as soon as I become eligible. Step three is to pay off debt, and step four is to contribute to IRAs...and this is where I my question lies...
I have a small amount of debt, when compared to others on this sub, and I’m very grateful for that. In contrast I also never thought about saving for retirement until two years ago and even then did not really understand how it all worked. Needless to say I feel way behind in saving for my future.
Through budgeting and negotiating myself into a higher paying job (by my standards) I find myself with an unallocated $400 at the end of each month and I would like to place it in the most beneficial and productive category of my budget.
The two areas that I think it should go towards are paying off debt, or funding my IRA.
My IRA is currently getting $1000 a year.
My debt is as follows:
- Paying $100 a month towards student loans
- Direct Unsubsidized Stafford, Balance= $1833.14, 6.550%
- Direct Subsidezed Stafford, Balance = $4722.48, 3.150%
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Both loans serviced through Great Lakes.
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Paying $274.22 a month on car payment
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Car payment, Balance= $13,634.63, 3.6%
What should I do with that extra $400? Pay off the loans, put it into retirement? Obviously I cannot pay off all of the loans, but I can make them go away a lot quicker. Using the student loan hero website and other online loan repayment calculators I feel like the interest savings is not significant weather I pay the loans off in a year or in five. The significant part would be the extra $374 dollars available each month!
Where I’m leaning: Pay off the student loan at 6.55% asap while also contributing to IRA as much as I can. Is this the best thing to do?
Thoughts and feedback certainly appreciated.
Edited: formatting
Submitted October 22, 2017 at 10:16AM by Neverstoplearning123 http://ift.tt/2hXZi5B
