[gerickson]

Recent college grad and young working professional here. I graduated with ~$25k in student loan debt 2 years ago and am due to pay it all off by April 2014. I struggled with burning question, as well.

The general advice I got was that if the loan interest rate is less than 6%, you're better off investing the majority of your excess cash into something like an index fund since it theoretically will give you >6% gains.

However, I hate the stress, mental overhead, and risk involved in owing somebody money, so I decided to automatically save 10% of each paycheck (set up direct deposit to funnel 10% to a separate savings/investment account) and essentially contribute as much as possible after that to student loans.

I'm happy where I currently am - almost out of debt and with a non-trivial amount saved up. The key for me was automatically moving the first 10% to savings then setting an ambitious goal each month to put toward debt. Good luck!

[jakebellacera]

Good job! After years of putting around with debt, I have kept a promise to myself that I wouldn't get into debt unless it was under dire circumstances. Peace has value, in my opinion. Not having to worry about debts and payments really frees my mind (and my funds) for other things.

I'm not one for biblical citations, but "the borrower is slave to the lender" always gets to me.

[gerickson]

As a follow up, after April I intend to reallocate so that 20% goes toward savings each paycheck.

[mistermann]

That sounds to me like an excellent way to approach your debt, good job.