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Author: Windowseat Big funky green star, 20000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308474  
Subject: Re: Student Loans or Invest? Date: 6/18/2008 7:15 PM
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The loans must, obviously, be paid, sooner or later, but which strategy will put me in the most secure financial position? If there are any insights or those who have had personal experience with student loans, I would appreciate your take on my situation.

Hi, welcome to the board.

The Fool has an article today about Gen Xers needing to save for retirement. I realize you're likely a Gen Y, but the information should still give you some perspective.

http://www.fool.com/personal-finance/retirement/2008/06/17/g...

Since the rate is locked in, and you don't have to worry about getting clobbered with a rise in rates, I'll suggest the following:

1) Establish a savings fund. This will cover the E-Fund, car maintenance, unexpected expenses, new computers, and other hits from life, as well as allow you to put aside money for things you want, but can't actually justify as a need.

2) Once the savings fund is established, lower the amount that is going toward it (but keep money flowing in) and start investing. In addition to a 403(b) you would also be eligible for an IRA, and if that is maxed out, you can even invest on your own.

3) keep paying off the student loan at the minimum amount.

And congratulations for thinking ahead and planning. Not everyone does so.

Nancy
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