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Make meaningful improvements to your finances every week.

Now's your chance.

Make meaningful improvements to your finances every week.

5 Questions - April

5 Questions: Home Equity Loans, Student Loans, and Mortgages

5 Questions - April

Today we’re answering listener questions. Student loans, home equity loans, over paying your mortgage and a day in the life of a data engineer.

We love to answer your questions on the podcast. If you are wondering, odds are someone else in the audience would like to know too.

1. I miscalculated and took out too much in student loans. Should I pay it back right away? Yes, pay it back if you don’t need it. Pay off the higher interest rate loan first.

2. Should I take out a home equity loan to pay for roof repairs? Yes, a home equity loan will have a lower interest rate than a personal loan or heaven forbid, putting it on a credit card.

3. Should we use Betterment as a savings account for a down payment, to bulk pay student or car loans, and as a place to keep a 3-6 month emergency fund? If you’re going buy a house in less than five years, no. Yes to the loans again applying the five year rule. Yes to keeping your emergency fund there.

4. How to allocate extra money to mortgage payments versus to a retirement fund or emergency fund? It’s almost never best to over pay the mortgage. It’s better to throw extra at the retirement account. If you do want to pay extra to the mortgage, pay more than once a month to cut down on the interest you pay.

5. What’s a typical day for a data engineer? Data engineer is a niche job so it commands good money. Andrew has an undergrad in info technology. He pulls data from various sources, builds warehouses to store it, and gathers insight from the culled data. He goes to lots of meetings.

Show Notes

Betterment: The easy way to invest.

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  • Andrew M

    I really like the question of #4. Always hard to decide if one wants to pay down debt faster or set up an emergency fund faster.
    Experiencing that right now, but my debt is much higher interest than a typical mortgage. (assuming typical is 4%)

    • jb1907

      You should have the emergency fund set up to cover most emergencies. If you have to put an emergency on credit card, you haven’t made progress.

  • jb1907

    You should have the emergency fund and retirement set up before paying down the mortgage. Most debt is more than the cost of the mortgage and you can use the power of compounding by investing early. Your mortgage will get paid eventually. The bank only wants X dollars per month. Now, if you have maxed out all retirement and you have enough emergency savings, then kick extra to the mortgage IMO.