I’ve been working for 7 months now after graduating with my BS in Nuclear Engineering. I’m estimated to make ~60k this year if my OT opportunities keep this pace. I have $120k in student loans left and have paid off $16,200 so far and live off of $1-1.1k/month. This Christmas I mentioned to my grandpa that I wouldn’t be getting any tax deductions on the interest or accumulating any credit score for the loans because $88k of them were in my parents name. And that I was trying to refinance under my name to get better interest rates and get them out of my parent’s name, but kept getting denied from companies that were supposed to specialize in student loan refinancing. (my interest rates averaged out to 6.2% on a 10 year plan compounded daily. My parent’s credit score also took a major hit due to the loans) He owns a business and has had the same bank for years and all of my family uses them too. So he made a few calls and got the bank to do him a favor. He got them to agree to a 7 year loan for 3% with him as the co-signer!
That rate is insane. And I’ve been told that less than 4% means it’s beneficial to invest, so I’m trying to reroute my monthly budget. Before, I was giving myself 0 cash flow and investments and only $1000 for emergencies, and dumping everything towards the loans.
I’m paid hourly and biweekly on a 5 week cyclical shift work schedule. On the worst month, I make ~$3000 after taxes. But I average $3300-3400/month take home.
My current budget plan is:
$1600/month loan payment
$1000/month living expenses
$200/month minimum savings up to $10,000 (~4 months living expenses for emergency.)
$100 maximum (until I get a raise) to Roth IRA
$100 maximum to bridge fund investments (Currently ETFs/Dividend stocks)
I’m expecting a $10,000/year raise by around May/June. Note: I’m also job hunting for something with better pay that better utilizes the “engineering” part of my degree, so I’m only putting 3% (the minimum) into my company retirement fund as I don’t plan of being there long enough to get the employer match.
Any tips or suggestions on how to best budget around this new loan interest rate would be appreciated.
Submitted December 29, 2019 at 08:18PM by Schnieds1427 https://ift.tt/36cbOpG
