01.27.10 | Balancing student loan repayment and savings
Graduating from college and getting your first job comes with a sense of financial independence. However, financial independence comes with financial responsibility. As a college graduate living on your own you will probably have rent payments, credit card payments and student loan payments among other financial obligations. So how do you balance building your savings with paying down your debt?
Without a doubt you should be making at least your minimum loan payments every month, but if you have extra money in your budget should you use it to further eliminate your debt? That depends. It is responsible for a financially independent person to have about six months of expenses saved up. This way if you loose your job or come into extreme financial hardship you have something to fall back on until you can get on your feet. My suggestion would be to put the extra money in your budget into a savings account until you have this six month safety net. Once you have enough savings build up you can use the extra money to pay down your student loans.
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