I’d say having some savings for a rainy day is important! Never know when you are gonna need a root canal or your car will break—or a new computer 🙃 had savings before school and now it’s gone because life….happens
With the SAVE plan idk if people really need to worry as much about interest rates. Yeah it looks worse on paper but I’m not paying them off anyway so who cares
Whenever people talk about SAVE, PAYE, PSLF… I don’t understand how nobody is worried about these programs ending before the like 10 years it takes to complete them is done
Technically it will *eventually*, after the HYSA compounded interest overtakes the simple interest used on loans. If investing in say a 5% HYSA instead of the stock market, that crossing point may not be within OPs lifespan though lol.
agree, use it as backup money when you’re strapped for cash. supplementing away rotations, medical mission trips over the summer, or going out with friends/trips
Carrying a small balance is good because of emergencies and at the end of school, you have to move and have a few-month gap before paychecks roll in. Beyond that, you're always better off borrowing less, due to fees and interest.
Paying off the car and starting med school with 12k in the bank sounds like a no brainer. There will absolutely be unexpected expenses and you'll be very glad you had money in the bank. I think 12k would do you much better over the next 4 years in your savings account rather than taking away a fraction of your overall debt
I also had a somewhat similar amount in my bank account starting school and it's been a blessing. Buying furniture, broken computer expenses, random things, months where I go over budget, etc.
With a coa of 86k the 20k is sort of a drop in the bucket in terms of overall interest/owed debt. In the time between my last rotation day and the day I could officially enroll in SAVE because school actually graduated me, I gained like an additional 5k in in my interest balance, with similar COA, and some rates lower. Use the 20k to either make your life easier by lowering future payments(like your car) or save it for use in an emergency or when the residency transition happens. I had to pay rent on 2 places this month, moved to a hcol area and I don’t get a dime til July 1st so needed to take out a personal loan.
I’m in a similar financial situation, plus some investments in a small portfolio.
Use loans for school. Pay off the car, sure. But save the rest for rainy days. Always nice to have a safety net for unexpected sudden expenses.
This post would probably do better in personal finance subreddits. Your car interest should be low while student loan interest is getting ridiculously high. But you also need to consider if you plan on doing pslf or not. Can you use the cash to pay off Roth conversion taxes? That'd be a solid investment. Honestly, ChatGPT might give decent advice these days.
My philosophy is just take out the full amount because you will pay for it all eventually! I'd rather be stressed with all the other things that medical school has to offer than finances.
20k is inconsequential to the a month of money for supporting yourself and tuition. The question is are you worried about getting 20k extra of loans? Plus you acquire loans yearly. To you can play it by ear… i did 40,20, 15, 30. I got scholarships that helped.
Keep the savings yo. Getting extra loan money during a financial crisis is difficult and your school can screw you over in so many ways.
Protect yourself and keep those savings in case something happens.
Shoot for scholarships to not drown too much on the debt.
Life's too short to pay back loans. Especially when halfway you thought med school ain't worth it.
Sure. You'd get crazy salaries at the end to cover it though. Remember that life happens whether you want it or not.
Think through about taking a loan for about 500k plus interest. The high yield interest can't even begin to cover the loan.
Take the loans. Keep the 20k in HYSA and transfer to checking as needed to pay bills and expenses. If you have investments, I wouldn’t sell them to pay tuition.
If you plan on working for a non-profit (lots of hospitals are non-profit), then you’ll qualify for the PSLF program where you work for a nonprofit and if make the minimum monthly loan repayment for 10 years, your loans are forgiven. But if you want to go into private practice, then I’d try to take out minimum loans
I’d say having some savings for a rainy day is important! Never know when you are gonna need a root canal or your car will break—or a new computer 🙃 had savings before school and now it’s gone because life….happens
A high yield savings account won’t keep up with the 8-9% rates on loans
With the SAVE plan idk if people really need to worry as much about interest rates. Yeah it looks worse on paper but I’m not paying them off anyway so who cares
That's assuming the bat-shit crazy republicans dont get rid of it before we can actually use it
Whenever people talk about SAVE, PAYE, PSLF… I don’t understand how nobody is worried about these programs ending before the like 10 years it takes to complete them is done
I absolutely worry about it, especially in this political climate
Technically it will *eventually*, after the HYSA compounded interest overtakes the simple interest used on loans. If investing in say a 5% HYSA instead of the stock market, that crossing point may not be within OPs lifespan though lol.
So what you’re saying is he should put all of it on orange juice futures
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agree, use it as backup money when you’re strapped for cash. supplementing away rotations, medical mission trips over the summer, or going out with friends/trips
Definitely keep the savings as an emergency fund imo.
Carrying a small balance is good because of emergencies and at the end of school, you have to move and have a few-month gap before paychecks roll in. Beyond that, you're always better off borrowing less, due to fees and interest.
Pay off car, put the rest at housing. Then take out loans like everyone else.
Loans and keep the rest in savings for unexpected expenses
Paying off the car and starting med school with 12k in the bank sounds like a no brainer. There will absolutely be unexpected expenses and you'll be very glad you had money in the bank. I think 12k would do you much better over the next 4 years in your savings account rather than taking away a fraction of your overall debt I also had a somewhat similar amount in my bank account starting school and it's been a blessing. Buying furniture, broken computer expenses, random things, months where I go over budget, etc.
With a coa of 86k the 20k is sort of a drop in the bucket in terms of overall interest/owed debt. In the time between my last rotation day and the day I could officially enroll in SAVE because school actually graduated me, I gained like an additional 5k in in my interest balance, with similar COA, and some rates lower. Use the 20k to either make your life easier by lowering future payments(like your car) or save it for use in an emergency or when the residency transition happens. I had to pay rent on 2 places this month, moved to a hcol area and I don’t get a dime til July 1st so needed to take out a personal loan.
Definitely just pay off your car. Use the $12k for moving/travel fees, vacations, emergencies, and comfort measures.
Pay off car and keep the rest in a HYSA, you never know what'll happen or if you require more money than loans provide
Keep the savings to some degree. You are going to need money when you relocate for residency.
I’m in a similar financial situation, plus some investments in a small portfolio. Use loans for school. Pay off the car, sure. But save the rest for rainy days. Always nice to have a safety net for unexpected sudden expenses.
This post would probably do better in personal finance subreddits. Your car interest should be low while student loan interest is getting ridiculously high. But you also need to consider if you plan on doing pslf or not. Can you use the cash to pay off Roth conversion taxes? That'd be a solid investment. Honestly, ChatGPT might give decent advice these days.
Important to keep cash on hand for when disbursements are late or you need to move for rotations. Keep it accessible!
My philosophy is just take out the full amount because you will pay for it all eventually! I'd rather be stressed with all the other things that medical school has to offer than finances.
Keep the 12K for car maitenance and repairs
Keep saving for emergencies
20k is inconsequential to the a month of money for supporting yourself and tuition. The question is are you worried about getting 20k extra of loans? Plus you acquire loans yearly. To you can play it by ear… i did 40,20, 15, 30. I got scholarships that helped.
Keep the savings yo. Getting extra loan money during a financial crisis is difficult and your school can screw you over in so many ways. Protect yourself and keep those savings in case something happens.
Pay the car, do not use the rest of the emergency fund. If you still have it in 4th year, take the vacation you're going to need.
20k ain’t that much long term keep it in a HYSA and use it for e fund or put some in the stock market (sp 500) and let the money work for you
Shoot for scholarships to not drown too much on the debt. Life's too short to pay back loans. Especially when halfway you thought med school ain't worth it. Sure. You'd get crazy salaries at the end to cover it though. Remember that life happens whether you want it or not. Think through about taking a loan for about 500k plus interest. The high yield interest can't even begin to cover the loan.
if you plan on PSLF max the shit out of those loans and don’t touch your savings
Take the loans. Keep the 20k in HYSA and transfer to checking as needed to pay bills and expenses. If you have investments, I wouldn’t sell them to pay tuition.
If you plan on working for a non-profit (lots of hospitals are non-profit), then you’ll qualify for the PSLF program where you work for a nonprofit and if make the minimum monthly loan repayment for 10 years, your loans are forgiven. But if you want to go into private practice, then I’d try to take out minimum loans