Question: I should be getting a addition to my (meager) salary soon. At the moment, I can barely make ends meet, especially during the winter. What should I do with my extra money? Is it more important to save it, or to devote it to my student loans?
My loans, by the way, are substantial, and weigh heavily on my mind. I only manage to pay a few hundred dollars in principal over the course of the year. On the other hand, my savings account usually ranges from $500-$2,000 in any given year. Theresa, Chicago, IL
Answer: Winter isn’t that far off, at least for the upper Midwest (sad to say). I would focus on building up your cash cushion with the extra income. Hopefully, you won’t be as financially stretched as before during the city’s chilly months.
I know that a large student loan burden is oppressive, financially and emotionally. But I would tackle it more aggressively once your personal safety net is healthier.
I would look into shifting into a different loan repayment plan, such as the Income-based repayment Plan? It might give you additional financial relief for now. You can learn more about the IBR here. A good resource for exploring all your repayment options is Finaid.org.
If you’re a member of your local public radio station, we thank you — because your support helps those stations keep programs like Marketplace on the air. But for Marketplace to continue to grow, we need additional investment from those who care most about what we do: superfans like you.
Your donation — as little as $5 — helps us create more content that matters to you and your community, and to reach more people where they are – whether that’s radio, podcasts or online.
When you contribute directly to Marketplace, you become a partner in that mission: someone who understands that when we all get smarter, everybody wins.