Author Topic: My plan of attack for student loans and beginning to ramp up savings  (Read 1866 times)

DanBrewMan

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Hi all!  I've gotten some great feedback so far from this community regarding my car situation and considering furthering my education.

But now I'd like some feedback for going forward.  When considering the info below, please refer to my other post for information about my budget and monthly expenses.

I have about $18k in student loans that I need to get paid off ASAP.  On top of that, I current have 5% of my income going into my 401(k) so that I can get the maximum matching from my employer (they throw in 4% on top of my 5%).  I currently take home about $48,000 and spend roughly $2400 per month (I am experimenting this month to see if I can decrease that to $2,100). 

I have about $1,450 of monthly spending that is "fixed" for now for rent, bills, utilities, internet, student loan minimum payment and health insurance.  Later this year, I am planning on moving somewhere less expensive and within bike commuting distance from work.  I'm also planning on changing my phone plan when the contract expires this year. 

My "variable" expenses for food, gas, pets, and everything else is currently $1035/mo, but am shooting for reducing that to $685/mo for March.  Best case scenario that leaves $1,815 per month for debt and savings.

Right now, my goal is to pay off my student loans by the end of 2013.  That gives me 10 months including March.  To achieve that I need to make a student loan payment of $1,800, which is my plan.  That really leaves no room for savings until I can untie some of my "fixed" expenses later.

The only other option I see is to simmer down the student debt payments a bit so that I can max out my Roth IRA (while I still can) and extend the student loan repayment into next year.  Should I be considering ramping up the 401k right now as well?  Or some sort of after-tax investments (Vanguard index funds)?

Zaga

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Re: My plan of attack for student loans and beginning to ramp up savings
« Reply #1 on: March 11, 2013, 04:49:07 PM »
I think as long as you have a plan of attack and go for it, you'll be fine whatever you choose.  Just keep looking for ways to decrease your fixed expenses all along and your savings will grow as your plan gets to them.