On Friday I had a free financial consultation at work to assess my personal financial situation. The result: I’m way behind where I should be as far as retirement and personal savings.
For the past few years I’ve been putting almost all my extra money toward paying down my student loans. I’ve always seen debt as bad, almost a moral failing. But the thing is: while credit card debt (which I tackled first and paid off a few years ago) is bad, student loan debt isn’t so bad, because it’s an investment. (Granted, in my case I’m not sure how much of an investment it was. I spend the first year after law school making a pittance and I never went to work for a law firm or made the big bucks.)
Student loan debt also has a lower interest rate than most “bad” loans. Given the low interest rate on my student loans, I should have been investing some of that money these past few years in something with a higher long-term interest rate. I just hate the idea of having thousands of dollars of student loan debt, but if I’ll make more money in the long term if I invest some of it.
I never knew much about my previous job’s pension/retirement plan and never contributed more than the automatic minimum. But now I know more. Since I wasn’t at that job long enough for the pension to vest, I have to take that money out. I might put it into my new 401(k) or into an IRA. I’ve been educating myself about all this stuff today – 401(k)s versus IRAs, traditional IRAs versus Roth IRAs…
I’ve also ordered Personal Finances for Dummies, which should arrive soon.
Maybe this will be my belated New Year’s resolution: to get my finances the healthiest they can be.
Yay.
