June 23, 2008
A Crash Course in Finance after College Graduation
The Washington Post ran a wonderful article on recent graduate’s finance questions from Michelle Singletary. Read the whole article by clicking here or read the excerpt below:
Many college graduates will soon be wondering whether they should aggressively pay off their student loan debt or let it linger and make monthly payments for the next 10 years or even decades to come.
Q: Should I buy a house in the Washington area or pay off part of my $52,000 adjustable-rate, 7 percent private student loan with the $25,000 bonus I will soon receive? I owe $98,000 more in federal student loans. This seems like a really good time to buy a house, but I would also like to pay down my debt. What is the best path to take?
A: Put off buying a home for now. You have way too much debt to take on a home. As for the bonus, hold back just a bit for your emergency fund. But then I would use most of it to pay down the student loan debt. Get rid of all that debt and experience the freedom you deserve.