Question: I am a 25-year-old college graduate with approximately $27,000 of student debt. I have been unable to find a job since graduating and am making $1,000 a month, give or take. I now have $1,500 in my checking and $1,000 in savings. This is the most money I have had at one time and am unsure how best to utilize it. My savings account is for emergencies. My budget allows for $150 a month of disposable income. Should I contribute what remains of my disposable income to the loans, save it or try to invest it? I am currently paying $100 a month to the loans to maintain activity. Thank you for your time. Nathaniel, Raynham, MA

Answer: You're doing a lot with very little. Congratulations. Obviously, money is really tight, so I would focus on continuing to build up your safe savings for now. You'll end up spending some of that money down the road -- perhaps on new clothes when you finally get a full-time job, or maybe on a move for work. The savings gives you additional financial flexibility at a tough time in the economy and job market.

For now, I would take advantage of the flexibility of student loans to minimize your payments. It looks like you may have already done this, but I would investigate an income-based repayment plan or the graduated repayment plan. You want to continue to be in good stead with your student loans, but minimize the monthly payment as much as possible at this stage of your life.

The trade-off for a low monthly tab on your student loans is that it hikes the overall cost of the loans. But there is no prepayment penalty with student loans. So when you get a good job with a steady income, you can always target your student loans and minimize the total price of your education. For now, though, I'd keep your money at the ready, so you can take advantage of job opportunities when they come your way.

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