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Keep with the loans or direct extra cash towards large catastrophe fund?

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  • Keep with the loans or direct extra cash towards large catastrophe fund?

    Hey, everyone! I figured I would pick some of the whitecoat investors' brains and hopefully spark some good discussion regarding how I should be planning here.

    The current issues I am dealing with is 1. How should I structure my student loan refinance in the setting of this current economic uncertainty with historically low interest rates? 2. How much should I be putting into a catastrophe fund?

    A little background. I am a new attending who just graduated in July 2019. My base salary is $415,000. I should make a little more than that this year with some added bonus. I’m a W2. My fiance makes about $60,000.

    I started off attending life with a huge debt burden of about $530,000. I have been very aggressive about paying my debts down and currently they sit at about $370,000. I refinanced as soon as I could and currently I have $60,000 refinanced with laurel road at 1.89% variable for 5 years. I also have $310,000 with Sofi at 3.74% fixed for 5 years. I have been very aggressive with paying them off and will be done in about 20 months from now. Most of the variable rates I’m looking at for 5 years are around 2.8%. I was thinking I would refinance the 3.74% Sofi loan.

    I would like to take advantage of these even lower interest rates, but truthfully I am a little worried I am going to run into some cash flow issues in the near future. First, I am getting married in June. (However, because of COVID-19 my wedding venue canceled all events till august) So, hopefully I’ll be able to get some of my deposits back, but who knows. My fiance and I now may just do a courthouse wedding or delay the wedding a year. We both have older, but still working parents. All of them have been hit hard by COVID-19 and it is a priority to us that we make sure everyone remains comfortable. Some months previously I was putting anywhere from $12-17,000 toward loans, but now I fear that money would be better sitting in a savings account in the event one of our parents/siblings/we need some help. Should my money I’m currently putting toward loans be put in a “War Chest” and then when life gets normal again go back to the initial plan of crushing the loans?

    My current written financial plan has 4-8K in a checking account simply so I don’t go overdrawn with 10K sitting in a high-yield savings account. I’m a fan of “sticking to the plan”, but this just seems unprecedented. My goal has always been to take care of the debt. My fiance and I both are pretty good savers. Our mortgage with utilities is about $850 per month, I drive a 2006 paid off car, she has a $200 car payment (which we are going to pay off very soon before we get married). I have tried to maximize my savings in the last 3 months, I got rid of my $1900 a month apartment a month, my fiance and I moved in together to save even more. I have been doing my best to curtail some of the lifestyle creep that comes with being an attending (new tv, weekend trips, ect.)

    Any thoughts? I would love to hear what some other people are doing. How has your financial plan changed? Thank you in advance.
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