I found a few sites that I really like to answer financial questions that I wanted to share with everyone. Cash Commons and Basically Money both allow you to ask and answer any financial question you like, vote for answers you life, and earn points and awards which mean nothing but gives you a better reputation on the site. I’ve asked several questions and answered a few others and I’ve gotten a lot out of the site so far.
The question I’ve been most interested in lately is what to do with the money I’m saving. I’m able to save over 50% of my paycheck, but I’m not entirely sure how to spend that money. I narrowed it down to several choices:
- Aggressively pay off my student loans, which stand at around $23,000.
- Invest the money knowing that I can probably beat the low rates of my student loans (~2.8%).
- Save it in an online savings account earning only 1.40% APY but allows me to have some flexibility later.
I’ve gotten a lot of excellent feedback, some that I agree with and some that I know may be helpful in someways but ultimately don’t feel comfortable with.
Here are a few of the various responses I’ve gotten and afterward I details what I ultimately decide to do.
Dr. Dean: Pay off the student loans aggressively after building up a 6 month emergency fund.
Mighty Bargain Hunter: Pay only the minimums on the student loans and throw the rest of the money into an emergency fund so that I’ll have added flexibility later.
MrChrister: Pay off the bills, invest a little for fun, save up for a big purchase, and enjoy the extra money.
ScottW: Save and travel. Create memories
Thanks for your advice guys, and I’ve taken a combination of your answers and decided to do this:
Save an additional $500 a month and building up a nice savings account. I will be sure to treat myself well and enjoy experiences and create memories rather than buying toys and gadgets I will likely forget about. I am increasing my “fun” budget by $100 a month for this, and I will not hold back if that needs to increase for special occasions. I’ll also be investing $200 a month, and I will save the other $200 in a savings account targeted for student loans (but I’ll take Mighty Bargain Hunter’s advice and retain some flexibility, even if it means losing 1%.)
What do you think, am I being smart or should I be more risky or conservative?