Note: I posted this over at my journal also (journals-f18/kcastle-journal-t15882.html
), but I'd love as much input as I can get! Thank you!
I have the story problem. Do you have the math skills?
We want to save for a house down payment, and we'd love to get into something sooner than later. Saving aggressively, we could have our DP in 1 1/2 to 2 years. However... We are paying off the rest of a $20k student loan next month (which is why we have no current home savings) and we'll have $12k left to pay at around 5% interest.
Currently, E and I both work, and we put my earnings toward loans and savings. But we're hoping to have a baby next summer, at which point I will either quit work or cut back significantly. Given this, should we a) pay the loan completely and then start saving for a house, or b) pay the debt and save at the same time?
I used to abide by the Ramsey-ian philosophy of NO DEBT WHATSOEVER, but since we have never ever had consumer debt of any type and are done taking out school loans, I'm less concerned about simply abiding by a debt-free principle and want to do what's smart mathematically.
Our rent is around $1000/month (and will keep going up over the years, as we live in Portland, OR, and landlords here like to ream renters). I hate throwing rent money away when we could be paying off a mortgage, but I don't know if our rent or our student loan interest will add up to more over time.
Thanks for your thoughts!