Hi Everyone,
First time poster here, but a long time lurker (~2 years). The MMM community has helped improve my quality of life significantly, so thank you to everyone! A little about us: I am 28 and very recent Ph.D. graduate in the biomedical science field. My SO, and recently engaged fiancé, is 24 and currently a graduate student in the biological sciences. We both have very secure positions, although the pay is not great right now (but has the potential to be much higher in the future).
My question (below financial details) is regarding how to best attack the debt we have.
Income (monthly): $4700
Expenses (monthly): $3580
Assets (total): $20,300
Cash: ~$10,000
Post-tax index funds (VTSMX): $7400
Employer matched 403b: $2900
Debts (total): ~$42,750
SO Car loan: ~$10,000 remaining, 2.75% interest
SO student loan 1: $7,500 earning 6.8% interest
SO student loan 2: $18,500 earning 0% interest until SO graduates from grad school, then ???
CC balance: ~$4000 We both have credit cards, but pay them off in full each month
Wedding ring payment: $2,750 0% interest for 15 months
Other things we need to save for: $10,000
Wedding (May, 2016): need about $7,500
Trip to Europe (May, 2015): $2,500
The question I have is: how should we attack our debt? After we pay off our CC’s and living expenses for the month, we will have about $2,500 in cash, which we were thinking of using for Europe (the only reason we are doing this trip is because we have free airfare and hotel for 1 person paid entirely).
Should I take funds out of the vanguard account and get rid of SO’s 6.8% school loan? Or leave the money in and just attack it with our extra income? It would be really nice to get rid of that debt before our wedding, but we’re going to need a bunch of money for the wedding since our parents can’t or won’t give us much.
Do we need a large emergency fund? We both have very stable jobs, so I was thinking only $500 or $1,000 and use the rest for Europe. We will have a year after our trip to save enough money for the wedding.
My goal is to be completely debt free by the time SO finishes school (about 2.5 years).
Thank you everyone!