6.30.2013

Erika Needs Advice- Pay Student Loans or Keep the Cash?

Hi guys! So this post is long overdue, since I've been meaning to make this decision for awhile now.

via

The other day I asked on Twitter whether I should just throw $20k at my student loans instead of keeping it in a "high-yield" savings account earning ~1% interest. Vanessa, Debt Blag, Evan, and Kathleen sparked up a conversation, resulting in differing views. Vanessa, Evan, and Kathleen thought it would be better for me to keep the cash instead of paying down my student loans, while Debt Blag thought that I should pay down my student loans instead of keeping the cash.

My initial thoughts lean towards Debt Blag's advice on paying down the debt instead of keeping the cash. The interest rate on one loan is 7.9% fixed and there's about $28,000 on that loan, with interest accruing everyday (unsubsidized grad plus loan). The benefits of keeping the cash is for emergencies and also to live off of after law school (graduating in May 2015).

However, I also understand why having the money as a safety net makes a lot of sense. The future is still uncertain, and I'm not sure if I will get a paying job next summer, or even as soon as I graduate. The BF has said repeatedly that I don't have to worry since he has a job, but we can never be too safe. I also know that my parents could help me out if I needed it, but I don't want to rely on any of that since something could happen and I want to be responsible for myself.

Currently I don't pay rent since I live at home in northern CA while I attend school, and I also don't pay rent in San Diego since I stay at my BF's place (I'm in San Diego for a summer internship but I go back to school in August). I minimized the loan amounts to just barely cover tuition and I rely on savings throughout the year. I'm very fortunate to have my family help me out with other items like groceries and gas during the school year. I do help out a lot at home as well - I drive my brother and sister everywhere, help out with cleaning and laundry, and tons and tons of errands, so I think both my parents and I are both benefitting. :)

Ideally I would like to purchase a condo as soon as possible (when I get my first stable job after graduating), and that's what I was saving the $25k for. It's what I actually saved it up for in the first place. But I also don't know if we will qualify for a mortgage at that time since I'll have more debt to add.

However, if I got to pay down this loan, it would save me a lot - 7.9% interest, potentially more since interest during deferral is added to the principal and interest is based off of that higher amount.

What would you do if you were in my situation? I'd love to hear your thoughts!

6.19.2013

I'm Alive!

Hi everyone! I can’t believe the last time I wrote in here was months ago. Sadly it’s almost July now and I’m finally just getting the urge to blog again. I miss the interaction and daily creativity that I experienced while running this blog daily. I also need guidance on my spending habits and financial decisions.

I also can’t believe I didn’t post right after my last final. 

I’m officially done with my first year of law school! 

I received 4/5 grades already and I think it’s safe to say that I passed all of my classes. I did absolutely nothing for a week and relaxed before packing up and heading to San Diego for summer. What I should have done is write my casenotes for law review and the high tech journal, but I just couldn’t get my brain to cooperate after 3 weeks of 24/7 hardcore studying. I guess I will have to wait until Fall.

I’m currently working at a pharmaceutical company as a legal associate and it’s been such a great experience so far. I’m learning a ton, and I am really grateful for the opportunity to work at this company and also see the BF again. They asked me what I wanted to get out of this job and all the work they are giving me relates to what I am truly interested in. There’s also a work gym with classes and lots of intern activities! The only downside is the commute – after work it takes about 1.5 hours to get home.

Partially the reason why I fell off the face of the earth for the 2nd semester was because on top of a heavy school load, I was also applying to jobs (legal summer positions), interviewing, and volunteering. I think in total I had 8 interviews! It was insane. I think it’s safe to share the company names now, but I interviewed with Twitter, LinkedIn, Samsung, TeleNav, a gaming start-up, IP firm, a legal consulting company, and this pharma company that I’m currently working at.

I received offers from Samsung, the gaming start-up, and this company but I will have to share my interviewing experience at Samsung on a future post because it was completely unwarranted and crazy! I declined the position and I also chose this position over the gaming start-up because it consisted of more legal work and I somehow am partial to the biotech industry as my last job was at a lab. I will have to also write up a post on tips while interviewing since I've just gone through a bunch of interviews within 2 months!

In other news, remember this post? The BF got laid off at the end of May and as luck would have it, a recruiter called him the following week and set up an interview for a cost estimating position. He took a $10k pay cut, but it’s still a lot more than he thought he would get, especially since his last job was an almost 50% pay increase from his previous job! So we are very grateful and he starts next Monday. Fingers crossed that this one works out for him.

What has everyone else been up to?! Any summer plans, vacations, or big news that I missed? Would love to hear all about it!
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