My husband and I are having an interesting conversation today over email … I have a fire lit under my arse to see how quickly I can pay off my college debt ($37,500). He has come back and countered “what is the savings to paying off your college loans quickly as opposed to the normal schedule?”
Here is my logic … if I make two payments on each of my college loans every month, I will theoretically have my college loans paid off in four years. This doesn’t take in account future child expenses (no, I’m not pregnant, but it would be nice to have kids within the next couple of years.) and even if I’m aggressive in paying off these loans, I would still be kicking around $400 per month to my “savings account” – a.k.a. my husband. This money would be used towards house projects and eventually towards a downpayment on a different car in the future. (We’re very far from getting a different car, but both of us drive older model vehicles. We’d probably be looking at getting something “newer” in the next five years.)
What’s missing in this equation? An emergency fund and retirement savings. Technically, we have an emergency fund, but it needs to be built up. And in terms of retirement savings, we are looking at setting up a Roth IRA for my husband since he does not have a 401K right now. (I also need to max out what I’m contributing to mine.)
So what do you think? I’m seduced by the idea of aggressively paying off my college loans. As I said to my husband, once that’s done – it’s done. (And actually, once it’s done, then we can turn that money towards paying off our mortgage – that’s about $110,000 in debt that would be wonderful to eradicate in a quick manner.) But there are other factors I need to consider … how would you tackle this problem?
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