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Should I be putting all my extra cash into paying down my high interest student loans?

March 14, 2017

Question:

Hi Jennifer,

I have a mountain of student loans, many with high interest rates. Should I be taking all of my extra cash and directing it towards paying off my student loans, or investing it somewhere?

Thanks,

Dr. H
 
Answer:

While I try to be a broad resource, this question is completely out of my realm, so I have asked my friend Ben Bush from Forest Hills Financial Group to comment. 

Hi Jennifer,

Good question – I hear this a lot from my clients in the early stages of their careers. The simple answer is that you should be doing a bit of both. I often work with my clients to develop a cash-flow distribution model that allows them to save and spend-down debt. The big mistake many people make is focusing only on the loan interest rates and not on the big picture. You want to position yourself in a way that ensures you enough cash on-hand to cover life’s unexpected expenses. It’s also worth exploring opportunities to re-finance or re-structure your student loan debt. This may enable you to stretch your payments out, providing for more available cash to save on a year-to-year basis.  

For one of your doctors, I'm always happy to have a free consult and help kick around some ideas.



Benjamin J Bush
Forest Hills Financial Group
122 E 42nd Street  Ste 2200
New York, NY 10168
646 638 9856 - Office
352 262 2795 - Cell
646 638 9884 - Efax
Bbush@fhfg.com - Email

 

Provided by:  Jennifer Kirschenbaum, Esq.
Should I be putting all my extra cash into paying down my high interest student loans?
Question:
Hi Jennifer,
I have a mountain of student loans, many with high interest rates. Should I be taking all of my extra cash and directing it towards paying off my student loans, or investing it somewhere?
Thanks,
Dr. H
 
Answer:
While I try to be a broad resource, this question is completely out of my realm, so I have asked my friend Ben Bush from Forest Hills Financial Group to comment. 
Hi Jennifer,
Good question – I hear this a lot from my clients in the early stages of their careers. The simple answer is that you should be doing a bit of both. I often work with my clients to develop a cash-flow distribution model that allows them to save and spend-down debt. The big mistake many people make is focusing only on the loan interest rates and not on the big picture. You want to position yourself in a way that ensures you enough cash on-hand to cover life’s unexpected expenses. It’s also worth exploring opportunities to re-finance or re-structure your student loan debt. This may enable you to stretch your payments out, providing for more available cash to save on a year-to-year basis.  
For one of your doctors, I'm always happy to have a free consult and help kick around some ideas.
Benjamin J Bush
Forest Hills Financial Group
122 E 42nd Street  Ste 2200
New York, NY 10168
646 638 9856 - Office
352 262 2795 - Cell
646 638 9884 - Efax
Bbush@fhfg.com - Email

 


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