Advice

[Anonymous]

While student loans were on pause - I was able to save $4000 in an emergency fund and also pay down a $12,000 credit card to a new balance of $7,300. The credit card has 0% interest until March 2024. I did a calculation for my student loans ( balance is $11,000) and my new repayment will be about $389 per month) estimate).

Should I throw my emergency fund at the credit card or student loan?

Both situations(credit card and student loan) feel like an emergency to me.

I am also a single parent and only real debt is mortgage. No car loan or anything else.

[Anonymous]

Can you cover the student loan payments out of your regular budget? If so, I would do that, keep building your emergency fund and once the interest kicks in in march pay down the credit card as fast as possible since I'm imagining its a high rate.

What is your emergency fund in? Right now you can be getting 4-5% in a savings account.

[Anonymous]

Anonymous wrote:Can you cover the student loan payments out of your regular budget? If so, I would do that, keep building your emergency fund and once the interest kicks in in march pay down the credit card as fast as possible since I'm imagining its a high rate.

What is your emergency fund in? Right now you can be getting 4-5% in a savings account.

I’m worried I will feel stretched doing it the way you suggest. I’m currently with Ally bank and earning that 4+ interest. I stopped my emergency savings once I got to the 4k mark and threw the rest towards the credit card. My other option is to reduce my contributions to 401k or fix my exemptions to take home a bit more pay.

[Anonymous]

well, until march 2024, you have 0 percent interest on the cc. So if you make minimum payments or a bit more and put aside as much as possible, can you pay it all off next march while continuing to cover your student loans? What is the interest on your student loans? Yes, I would reduce contributions a bit to pay off CC if I needed to. Can you pick up some gig work on the weekends?

[Anonymous]

Are you a single parent alone or a divorced parent with shared custody? That would personally affect my calculus on the priority of emergency savings a lot.

[Anonymous]

What are you contributing to your 401k?

[Anonymous]

So glad you can get ahead without paying your student loans back.

[Anonymous]

Great work OP! Here is what I would do:

1) Keep savings in your HYSA until interest resumes on student loans and then let interest accumulate

2) then when student loan pause is over (like in two months or so), stop putting money in HYSA and start contributing to student loans every month and whatever extra you can afford without feeling stretched.

3) in March take out whatever is in EF, minus one months expenses, and put towards credit card. Then start paying whatever extra you were putting towards student loans to credit card until its paid off.