Max out on 401k or pay off student loans?

[Anonymous]

Meant to add that in a few years, once my loans are paid off, we will use the rental income (which we hope will only go up, considering development in the area) toward joint expenses.

[Anonymous]

Pay off those loans! No reason to carry around debt if you don't have to. Debt = risk. When those are gone, then you'll have more cash and can invest/max out 401k to your heart's content!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

OP, why do you and your DH keep your finances so separate? You are a team making decisions for the long run interest of the team. Do you get more return out of the rental house than he does? Is the debt/equity precisely equal between the house you live in (is this in oth your names or just his) and the rental investment (I interpret your description as being owned jointly despite the fact that it was largely your money going to the downlayment). It sounds like you are both savers on the same path but in parallel rather than jointly. There could be a better decision if you consider your family finances as a whole rather than two attributed pieces

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I may not have been clear on the sharing of expenses. I contributed largely to the rental house as I had the cash I had been saving. Currently, I am using the small amount of extra cash from the rental income each month to help toward my loans. (So 1/3 of the monthly student loan payment I make comes from the rental income and 2/3 from my own earnings). Since I had the benefit of walking into the house he invested in 6 years prior, we just call it even. We both contribute to the mortgage on our current house. Our names are both on the mortgages for both houses. We contribute jointly to all shared expenses. Its only that I don't contribute to his car payment, as I'm working on my own student loans, which I don't expect him to contribute toward. I know some couples put it all in the same pot, and maybe we would at some point, but at this point, we haven't made that decision.

Are both your names on the deeds to each of the properties?

[Anonymous]

Our names are both on the mortgages for both houses.

Are both your names on the deeds to each of the properties?

Yes

[Anonymous]

Anonymous wrote:Pay off those loans! No reason to carry around debt if you don't have to. Debt = risk. When those are gone, then you'll have more cash and can invest/max out 401k to your heart's content!

+1. Pay them off as fast as you can to get that albatross gone. You'll feel way better and I bet you can do it in a year or two max if you really focus. I paid mine off 10 years ago and put off buying a house and doing other things to do it and I'm so glad I did. I have the freedom to make different job/life decisions because I don't have student loan debt.

[Anonymous]

Anonymous wrote:

Our names are both on the mortgages for both houses.

Are both your names on the deeds to each of the properties?

Yes

That is good, it sounds like you are 90 percent of the way to joint finances.

I agree that you should do what you can to pay off you student loans as soon as possible without compromising your retirement contributions. I personally would look at your budget realistically as a couple, not as individuals that contribute proportionally to shared expenses. All expenses, including his car and your loans, are joint costs of the family unit as is all income and what is the best way to support paying off the debt with the family HHI. That does not mean you do not have individual accounts, you probably do and you use discretionary money on expenses but the higher earned does not necessarily get more discretionary income.

I think it is disruptive to a marriage if you have a yours and mine entitlement attitude. Everything is not always equal but everyone's contributions are equally valued. Right now I make slightly more than my DH and there have been times we made the same or he made a bit more. I expect there will be a times when he makes a lot more but it really does not matter. We also bring different skills and contributions to the marriage and if at some point we decide that I work part time for best outcome for our family it would be because my contributions outside of my paycheck also are valued. There would be no option where he as a matter of higher earning power is entitled to spend more discretionary income because of disparities in our paychecks. That does not mean everything is always equal but major expenditures are jointly decided upon. For example, if I were single I would not spend a couple of thousand dollars a year on Nats tickets. But we do because they are important to DH and I think they are a good family outing (many games neither I nor our children attend). We looked at whether we could afford them, not whether he could.