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The Simple Dollar

Student loans: paying off loans with different interest rates

Student loans can come with different interest rates. Is it better to pay off students loans that you owe the most on, or that have the highest rate first? Look to question No. 6 of the reader mailbag.

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Trent, what do I do? I want my grandma to have a comfortable, peaceful life. I want my parents to be less stressed out because they spend a lot of money on her and provide her so much care, when it still isn’t enough.
- Ellen

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There’s a lot more going on here than just money.

Most likely, your parents are so used to your grandma being a steady and strong fixture in their life that it hasn’t really clicked for them that she is fragile now and that her life really won’t continue forever. It is often difficult to imagine our parents growing old and it often sneaks up on us without us really realizing it. Mom and/or Dad have just always been there. They’re the constant in our life, from infancy onwards.

I witnessed this happen with my own family, where an elderly great grandmother who had been such a rock in so many people’s lives began to weaken and many people simply failed to acknowledge it.

Since this is not your money we’re talking about here, you have little control over the situation. I think you are already doing what you can, and all you can do from here is keep the subject alive in the mind of your parents.

If your family is like mine, it’s not so much a money issue but a “not wanting to face the real situation with grandma” situation. That just takes time.

Q5: Preparing for a growing relationship
I have been in a relationship with my boyfriend for over 2 years. We moved in together a few months ago. I know that eventually we will get engaged and married, and this was something we discussed multiple times before cohabitating. We are in no rush to get married. I am very happy with our relationship, and so is he. We are in our mid-twenties, and I feel so young. I have seen my friends marry young and divorce already. So I do not want to put unneeded stress on our relationship by setting demands to be engaged or married within a certain period of time. Another reason that I am not pressuring him to propose to me is that weddings cost so much money.

My boyfriend and I have stable jobs, and we make $60K and $72K. Our financial situation is pretty good. We each contribute 12-15% of our gross salary to retirement funds. We have emergency funds. Our only debt is student loans and his car loan. He has $13K in student loans and $10K on a used car he bought in December. I have $32K in student loans. (It was $40K 3 years ago, but I am making progress!) We have no credit card debt. We put all our living expenses on one credit card that is in his name, but I am an authorized user. We pay that off in full every month. I also have a car/house fund, and one of his benefits is money towards our first home purchase. We are not big spenders, and we do a lot of research or give a lot of consideration before purchasing any big ticket items (e.g., vacations, furniture). Our primary long-term goals are paying off our loans and saving for a house.

So my question is how we are supposed to afford a large, glamorous wedding that people keep hinting about? If I had $20-30K extra laying around, I would love to have a big wedding with all our friends and family. The reality is that we do not have such funds. My family also does not have the money. My dad passed away a few years ago, and I would never ask my mom to pay because she needs to focus on her retirement plans. My boyfriend once suggested that we borrow the money from his parents to pay for the wedding. I cannot get comfortable with borrowing that much money from anyone for a wedding. I feel that given our financial situation and all the uncertainty in the economy these days, we should have a small, intimate wedding with just close friends and family or even a destination wedding with just a handful of people that are closest to us. I think there will be a lot of pressure for us to have a big wedding, particularly from his family. His sister was married last year, and it was a large wedding with about 150 guests and cost $30K. And I feel like his family will be disappointed if we do not have something similar so that all his extended family can attend. That is another dilemma – his family is from the North and mine is from the South. So neither location is convenient for everyone, and weddings are even more expensive where we live (DC area).