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Ouze wrote:

 Sasori wrote:

 sebster wrote:

 Sasori wrote:
Investing in something like a Roth IRA as soon as you can, is one of the best things you can do to set it up. Just make sure the money you are investing, you don't need later. You never want to pull out money from it.

Be really careful about given advice this specific advice, because whether the plan works for individuals depends on their specific circumstances.

You should also defiantly pay off any student loans you have. They are the worst kind of debt to have.

What? They cost 4-5% pa. You can pay double that on a car loan, and four times as much on a credit card.

Though I do like the idea of defiantly paying. It’s like regular repayment of debt, but with more attitude.

The issue with Student loans, at least in the US, is that they will follow you to your grave. There is no way to ever drop them.

Sure, it's nearly impossible to discharge student loans - no argument there. But most people do not declare bankruptcy, yes? So that specific element isn't often going to come into play. In normal, non-bankruptcy situations, then really no loans are more dischargeable than others.

To be clear, I'm not trying to engage in needless pedantry, but I feel like in a thread full of financial advice, the maxim that "student loans are the worst kind of debt to have" should be challenged.

If I hypothetically owe on a student loan - $10,000 at 5.5% interest; and I also have $10,000 in credit card debt at 24% interest - which should I be concentrating on paying off first, assuming I'm not planning on declaring bankruptcy? Because I think this situation is a lot more common.

Fair points all around. I'll concede.

With the caveat that Gen X and onward are seeing a large decline in their total networth, compared to previous generations. One of the major contributing factors is student loans, which have risen consistently over the years, while Household credit card debt has either decreased or remained steady in the same time frame.

Yes, you are absolutely right that 24% interest credit card debt on 10k, is much worse than 10k student loan debt. The average student loan debt is 3 times that amount though. With the amount of graduates having trouble finding finding jobs, this is really a compounding effect.

So, Seb, Ouze etc is right. High interest credit card debt is extremely bad, and is typically worse than most student loans, at least in the short term.

Mea Culpa. I'll be more careful in my phrasing in the future.

 Sasori wrote:
Yes, you are absolutely right that 24% interest credit card debt on 10k, is much worse than 10k student loan debt. The average student loan debt is 3 times that amount though. With the amount of graduates having trouble finding finding jobs, this is really a compounding effect.

For my part, I will happily concede that for the average 20 year old working part time, it's a lot easier to accrue say, $30,000 in student loan debt than it is to get approved for an equivalent amount in unsecured credit cards - that angle you're totally right on.

 Sasori wrote:
Mea Culpa. I'll be more careful in my phrasing in the future.

Cool Much respect for your answer.

Normally, there is a lot of stuff that hotsauceman1 posts that cause my eyes to roll... this topic is totally not one of them.

Good on you for starting your saving.

 Sasori wrote:
With the amount of graduates having trouble finding finding jobs, this is really a compounding effect.

That's really a key and a reason, when I was teaching, I made sure my students that were iffy on college knew about the opportunities available through apprenticeships and skilled labor jobs; most of which don't require a person to incur obscene amounts of debt, and many of which are also in high demand right now.

Compound interest is the most powerful force in the Universe. So yes, saving early is good.

I didn't start saving until I got my first full time job out of University. I don't regret that, why scrape a few pennies together when money is tight and you know you're going to be earning a proper wage soon? I have always saved since then and joined my employers' pension schemes though.

El Torro wrote:
Compound interest is the most powerful force in the Universe. So yes, saving early is good.

I didn't start saving until I got my first full time job out of University. I don't regret that, why scrape a few pennies together when money is tight and you know you're going to be earning a proper wage soon? I have always saved since then and joined my employers' pension schemes though.

Well im not talking a retirement(Im getting that as soon and im outta school though) Im thinking of paying off student loans. ith that I can have more money that actually goes somewhere rather than down a toilet.