Preparing for unemployment
I will be separating from the military in 2 years. My wife and I have student loans at an average of 6.5%. I'm trying to save as much as possible for our "transition" fund. Right now we pay the full monthly payments on our student loans but have the option to use the income based repayment plan.
This would reduce our monthly cost by $150 for the next 2 years. I'm battling in my head because I know it makes little financial sense to save $150/month in a savings account earning less than 1% instead of paying down debt at 6.5% but I want as much in a savings cushion for our impending unemployment period. Obviously we are hoping for a short transition time but you never know.
Money is freedom.