Am I doing the right thing (or hurting myself) (Debt question)?
* I've been fastly repaying my student loan. Even though it won't expire until 2016. At the present rate, I would have payed 100% by next June.
** Since 60% of my monthly salary is funneled into this student loan (and 20% goes to paying rent) I'm making huge sacrifices as only 20% of my money is available to me.
* By sacrifices I mean things like: avoiding eat-outs, cinema or club outings (don't even have a girlfriend too costly for the time being)
So the question is: am I obsessed with this debt? Should I relax a bit and enjoy life a bit more? Bear in mind that once I have this debt out of my mind I plan to recompense me with a one month trip to Spain.
Am I too much money conscious (stingy)? Too much disciplined? Or am I doing right? Thanks
Answer:
Sounds like you're doing pretty good to me. You're handling the money pretty well and maintaining massive amounts of self control! Just keep it up, tough it out, and enjoy the hell outta yourself in Spain!
Sounds like you are very disciplined and that's a wonderful thing, but you also need to enjoy what you've worked for. It won't hurt to treat yourself once per month to a movie, dinner or a night out with friends. Set a limit before you go, when you run out of money, it's time to go home.
You are probably HURTING yourself! In fact you are probably HURTING yourself badly by not taking advantage of all that time you have to pay your loan off.
What is the interest rate you are paying on your loans? If it's less than 5% you should only pay the minimum monthly amount and invest the rest in a high-yield savings account or market fund with a generous return interest rate. In the long run you could actually profit off your student loan. You have until 2016? Slow down! What's the hurry?
Don't pay more than you have to. While it feels good to quickly reduce your debt you could be using some of that money to generate more by having interest work for you.
Why not put some of that money in a savings fund like at emigrantdirect.com. It costs you nothing and you'll make over 5% in interest!!
Too many people wrongly believe it's not good to have an outstanding loan for a long period of time. Student loans are the exception because of the low interest rates.
You are doing the right thing.If everyone did that they would have no credit problems.Paying your loan off like that will ensure your credit to be good.That is what young adults should do to keep good credit.Paying early is always better than paying late.Keep up the good work.
keep up what your doing, it's better to pay off everything as soon as possible, that way you won't have to worry about it later
ummm. idk
I think your plan is great! I have been working very hard to get myself out of debt for the past 6 months and I have been making the same sacrifices. The only difference is I give myself an "allowance" of $25.00 a week after bills and gas so that I can treat myself to something small each week. You have a goal to look forward to so you won't get discouraged. I give you a lot of credit for doing what you are.
60% of one's monthy take home pay is more than most would budget for student loan payments. there's nothing wrong with it if one can afford to do so without changing one's current 'lifestyle', whatever it may be. however, i would not recommend it unless one was vested in a retirement plan, has other investments other than day trading, and had their home, if they own one, paid off. and then we start to get into monthly bills and insurance. if one can manage all those things, stay employed, and have some social component on a regular basis, then i say pay it off sooner than later and get a business started.
The answers post by the user, for information only, BAnswer.com does not guarantee the right.
Other Questions and Answers: