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So anyway...the plan is to pay off/refinance my home equity line by the end of September. This will free up another $200 in cash for a total of $900 in net free cash flow. Once the home equity line if paid off, the plan is to put any extra money into an emergency fund. With the inclusion of my student loans, my monthly expenses are going to skyrocket so I tried to calculate an adequate emergency fund. My short-term goal is 3 months or $14,000 which should be attainable with tuition reimbursement, any additional aid money, bonus and my tax return. I need to make sure that I can stash enough cash away to make sure that I can pay the monthly payments on my student loans should I not find a law job right away. I also have the option of placing some of the loans in forbearance should I need to do so. I hope not. So that’s the plan...I know I can do it.
*** I took a conservative approach to my emergency fund calculation:
- $200 in extra transportation (outside of insurance)
- $400 for health insurance (arbitrarily)
- Kept my standard of living the same
- Factored in full payment for student loans(I'm on a graudated payment schedule)
- Provided a $300 cushion
4 comments:
Depending upon where you go to law school in Chicago, a lot of those friends who don't seem worried about the loans are probably taking jobs with law firms that pay $125k+/year to start. They neglect to consider that they may only be working there for a couple years (for whatever reason).
The other possibility I see is that they are just a typical example of current American society. We don't seem to worry about debt as much as we probably should. It's irrational, but it's also pretty common, I think.
I guess I am one of those people from the first group and maybe a slight mix of the second group as well. I hope to land a high-paying job when I'm done and, of course, I also hope to keep that high-paying job for quite a while. We may all just be delusional. But I am not terribly worried about my debts, which will be circa $100k when I'm done.
I guess I am just a worrier. Another thing that jaded me was that I graduated from college in 2000. Soon afterwards, the economy tanked and lots of people lost their jobs and had a hard time finding a new one. The job market was also tight when I began considering law school, which is one of the reasons I kept my full-time job and opted to attend school part-time. In the back of my mind I was always a little worried about the student loan payments, the economy, and the prospects of getting a job once school was over. I derive a lot of comfort knowing that I at least have a job/career now that can support my expenses and future expenses.
You should be making a solid salary when you graduate so paying them back shouldn't be too much of a problem unless you go on a major shopping spree when you get your J.D. Wait to get a new car and such and paying the loans off shouldn't be too bad.
I'm a sucker for excel.
But don't worry about student loans. I still have some (not as much a you) but all the interest is tax deductable. Depending on when you lock in a rate, it might be better to pay slowly.
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