QUESTION: How we should be allocating our money?
My husband and I recently got married about 8 months ago. We’re slowly trying to figure things out but we’ve had no real strategy with personal finance the past year or any order to the money madness. I’m doing tons of reading and I want to be smarter about how we allocate our money.
Summary: We have 45K in savings with a 68K of student loans and wanting to buy a house in Austin Texas. Starting to invest and figure out how best to make our money work for us.
Life Situation: Recently married and filing married/joint no kids– Austin Texas
Combined Adjusted Gross Income: $7,200 monthly (after taxes, 5% in 401K – company match, HSA, etc)
Debt – Student Loans: $68,000 in student loans at 4.625% through SoFi (It was at 98K 18 months ago) – no other debt aside from student loans
Savings: $45,000 in a money market at 1% - initially for a down payment
Current Monthly Expenses: Student Loan Repayment: $2,400 (goal to pay off in 2.5 years) Apartment Leasing - $1200 monthly (will be around $900 in 4 months if we don't buy, we currently have a 2/2 and looking into 1/1) Other living expense (utilities/insurance/bills/groceries/etc) -$1600 Savings: $2,000
My question is: How should we approach this? Pay off loans first? Buy a house and while paying-off student loans? Forget the house and just use our 45K of savings to pay off a large portion of our student loans? I realize it would be more strategic and logical if we were to apply some simple math but I’m not sure what sorts rules, formulas or comparison I should be making (interest rates of mortgage rate vs loan rates vs current rent??).
We want to buy a house because housing in Austin has skyrocketed in the past 4-5 years and I think it’s going to continue climbing along with interest rates. We're planning to live here for a long time since both of our families live here. Mortgage rate around 4% (we have great credit score)
Thanks in advance!
Submitted July 18, 2017 at 05:37PM by thm05 http://ift.tt/2vg3C5E
