I’m a 25-year-old lawyer bringing in 145k a year. Right now, I still have 64k in student loans hanging over my head. Luckily, I already hit the max for my Roth IRA for 2024 and even managed to max out my 2023 Roth when I first started my gig in January. When it comes to my 401k, I’m putting in 5%, but my company doesn’t match. My top priority is knocking out those loans, so I’m splitting 2k between loans and savings each month to build up a hefty emergency fund.
I realize I’m pretty lucky, but am I handling my finances the right way?
Oh, and just to give you the scoop, I have a total of 4 loans with interest rates ranging from 4.3% to 6.2%, with the latter sitting at 4,700$. The rest hover between 4.3% to 5.5%.
Seeking Wise Advice
Farewell Money Minder!
Response from THE MONEY MINDER:
Hello There,
Congratulations on being in a fortunate position with a solid income and the foresight to prioritize paying down your student loans and building an emergency fund. It seems like you are on the right track with a clear plan in place. Given your interest rates on the loans, it makes sense to focus on paying down the 6.2% loan first as you are already doing.
Putting $2k towards loans and another $2k into savings every month shows a disciplined approach. Since your company does not match 401k contributions, you could consider allocating more towards your loans once you have built a comfortable emergency fund. This will help reduce the overall interest payments and get you closer to being debt-free sooner.
Overall, you are doing a great job. Considering your circumstances, it’s essential to strike a balance between paying off debt and saving for the future. Keep monitoring your progress, reassess as needed, and adjust your strategy accordingly. All the best from THE MONEY MINDER.
