First the Good:
SO and I are young, 22 and 23, with a significant chunk of our living expenses being paid for by our parents despite the fact we live in our own apartment. For instance, we are still on our parents' insurance plans, phone plans, etc. We also have roommates sharing our rent, a BJs membership, and a few more things going for us. As a result, our combined living expenses hover around a staggeringly low $2,300 a month, for rent, utility, groceries, and other vital things. Even luckier, both of us are fresh college graduates with no debt, student or otherwise. I make $65k and they make $48k annually.
Then the Struggle:
Our weak point is our savings. As it is, we have very little saved since we both just graduated. We're looking to start saving aggressively for two discrete goals. Firstly, we'd like to have the ability to retire before 65. But more pressingly, SO is currently applying to Med Schools, and planning to attend within the next 1-3 years. Of course, we will need to take out loans for this, but the more we can afford up front, the drastically more we will save in the long run. We estimate a tuition cost of $200,000, paid at $50k per year. We also assume my level of employment will stay steady during their time in Med School, but they will not be working. And of course, our living expenses will increase over the years as we roll off of our parents' various plans
Finally the ask:
What is the most efficient way for us to go about achieving our goals? Should we create two savings accounts? One for tuition and one for simple retirement? We could kick a healthy chunk out of our soon-to-be debt with 15% monthly being set aside for tuition, still leaving us a hefty 20% of our income able to be put towards retirement savings thanks to our great situation. But is it worth it to go even further to the extreme and aggressively save upwards of 25-30% for the tuition? I mean, we don't know what inflation or interest rates will be by the time we take out the loans. But also, even if we don't like thinking about it, we're trying to be aware of the possible future where she can't finish med school for some reason and we get stuck with the debt. Any money we put into IRAs and 401ks can't be flexibly taken out and spent on tuition, so really this is something we need to make some decisions about now.
Truthfully, I have no idea how to go about achieving these two discrete goals at the same time. Any advice would be appreciated, and I can give more information if it's needed. I'm well aware of how lucky our situation is, and I desperately want not to squander it, and to get the most out of it.
Submitted August 21, 2022 at 03:02AM by The_Nerk https://ift.tt/9khEeFU
