I’m 24F and live in relatively MCOL area (midwest). I recently graduated with a master’s degree and I’m now working. My salary is $115K base, but I work nights so differential makes for $125K. I have $120K in grad PLUS student loans with ~7.7% interest (still within the 6-mo interest deferment period until Nov). No other loans.
My current base expenses: car insurance ~$150/mo (car paid off), phone $50/mo.
As much as I’d love to pay off my debt, I have a tough living situation with my parents. There are several factors that I’ve noticed, at times, take a toll on my mental health. As much as I’ve built coping mechanisms to remain mentally sane it’s still difficult for me to rationalize staying home.
With that being said, I still have high interest six figure debt. Realistically, is sacrificing my mental health and well-being worth paying off this debt?
Of note, my car runs fine, but I’d also like to look into my options of buying a newer (used of course) and more reliable car vs lease. I don’t want to let lifestyle inflation kick in. I want to be wise.
I’ve read so much into finances, watched a lot of videos on loan repayment strategies and investing, etc etc, but I find the answer isn’t so black and white. Any input is greatly appreciated!
New grad- move out or pay student loans?
byu/Practical-Cheetah-38 inStudentLoans
Posted by Practical-Cheetah-38
6 Comments
I don’t think there is a black and white answer. If it were me, I would look into moving into a house or apartment with a random roommate. If your mental health struggles too much, I think it could bleed into your work.
Ultimately you have to do what is best for you. Maybe you can take some middle approach where you save up a fully funded emergency fund and some extra cash then move out with a roommate. Maybe you can rent a mother in law unit somewhere for relatively inexpensive. I would start shopping around different places and do the math to see what works.
Keep the car as long as possible. It doesn’t make any sense to take on more debt until you have more of your student loans paid off.
You have too much student loan to even be thinking about replacing your car right now. Car lease is also a terrible idea. You always have a car payment and right now you want as much cash flow as psychological with 6 figure loan debt.
Only one year of full time work with no living expenses could completely change the trajectory of your entire life. I was in your situation and chose to stay home, but I try not to offer advice in that regard because no one knows your parents like you do. Paint a real picture of what life would look like if you moved out and take a chance on which option leaves you happier
This is a personal tradeoff question that we don’t have enough information to even advise on. It depends entirely on how difficult it is to stay at home and what your other housing options look like.
As someone who moved out, don’t. Stay at home eat the shit sando and dump every extra penny into your loans. Do that and you will be so so much better off. Student loans are an empty payment you don’t build equity on them, so when you’re done you can replace paying them with a home and build a future.
Buying a new car can wait of course. How much would moving add to your monthly expenses? Presumably it’s the cost of rent and utilities in a MCOL, say $2k? (Plus you’ll have some initial costs to furnish.) If you’re bringing home ~$7k per month? You should still be able to tackle your loans in under 5 years if you move out. If you stay home, just assume you can put that extra $2k toward your loans, that’s $24k *more* per year. Only you know if it’s worth staying home or not for that amount.