Hi all,
New Mustachian here, trying to figure it all out. I have a question that I've been grappling with as I arrange my finances.
I have $35,000 of student debt (two loans of $25K and $10K each). Both are at 2.5% variable interest rate, the rate hasn't changed in a long time and I don't expect it to. I am paying the minimum on the bigger loan ($237 a month), and more than the minimum on the smaller one ($500 a month). I also invest in my company's 401K (6% of income), Stock Purchase Plan (5% of income), make contributions into my Vanguard accounts (~$720 a month), and put ~$720 a month into a general savings account, where I keep about 10K. I make about $125K a year.
Should I concentrate on paying off my loans first and foremost, and then invest? Or should I continue putting money into investments and savings, while continuing to pay my loans as I have been? I expect to get some sort of bonus come Feb/March (probably about $10-$15K), and I plan to put that money fully to pay down debt.
I know that normally paying down debt comes first. But this debt is at only 2.5%. I get a better rate of investment than that.
Please help!