Hi yall, to make it short I inherited 5K when my grandmother died a couple of weeks ago. Is it better to use this to pay off some of my 120K worth of student loans or to open a high yield savings? I have wanted a HYS for a long time but haven’t ever been stable enough to do so as I live paycheck to paycheck. Also if people have other ideas I am open. Thank you in advance.
Pay down debt or high yield savings?
byu/One_Alternative_1423 inpersonalfinance
Posted by One_Alternative_1423
3 Comments
Depends on the rate of the hysa and the loan. More likely than not it would be better to pay down the loan
I’d maybe split it. Keep $1–2k in a HYSA as your starter emergency fund, then put the remaining $3–4k toward your student loans.
Since you’re paycheck to paycheck, having some cash buffer matters more than going all-in on debt right now… this way you get both stability and progress.
Clear off the debt first. Always works