[USER]

I just looked at our total finances for the first time in a long time and I’m shocked my husband and I have a 500k net worth including our home.

We only have student loans and mortgage debt.

So two questions, we have over 200k in various investment vehicles currently and have about 160k in cash right now. Our monthly expenses are low about 3k a month for both of us.

I’m thinking of just keeping 10k for an emergency fund in cash and invest the rest. But is that too little cash?

Also should we just pay off our student loans? Or since they are in forbearance it doesn’t matter?

We have 50k total between us. (Yes the 500k net worth takes into account the student loan debt).

It’s crazy because we were in massive debt only 5 years ago. We really turned things around and it feels amazing!

[Jule]

Yes, pay off the student loans, keep $20,000 in cash for emergencies and invest the rest.

[Lishbug]

I’m in a similar situation but I don’t think I’m going g to pay the student loans until the end of my forbearance next year just to hold on to the lil bit of faith.

I’m prepared to pay and be done by then if nothing happens for me….I’m gaining no interest and put the $ in a CD that will mature just before the forbearance ends

[Kim]

Go ahead and get fully out of debt. Pay off those student loans while there is no interest accruing!

Save your emergency fund of 3-6 months worth of living expenses in a HYSA.

Invest the rest!

[Cain]

$10k is too little cash. That’s barely 1 grown up emergency. $36,000 sounds like a reasonable amount for an emergency fund.

Unless you plan to sell you house and not live in it, it doesn’t mean squat in your net worth calculation.

Based on the area I live in, everyone is a millionaire based on their house cost.

Keep $36k, then pay off the student loans.
Also, use FI numbers.

1 year salary in retirement accounts by age 30.
3 years salary in retirement by age 40.

6x by 50.
10x by 60.

[Mark]

Putting aside politics and psychology (the peace of mind from being debt free) if there is any chance student loans might be forgiven in the future it is a poor financial decision to pay them off early.

[Ani]

I think it depends on how aggressive your investments are. With a relatively stable portfolio you can afford a smaller emergency fund because you probably won’t be facing losses if you have to liquidate at short notice.

With a volatile/aggressive portfolio you want a larger emergency fund so that if an emergency strikes when the market is down you aren’t forced to liquidate your stock assets at a loss.

My portfolio is very aggressive, around 24% annual gains on average, which means it’s risky and I don’t want to be forced into making any moves by outside circumstances.

I’m also an expat so there is limited government social safety net available to me. Based on that, I keep 12 months of living expenses in a HYSA.

Once you look at your life and risk factors you’ll have a better idea of what works for you. x

[Author]

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