Ask USAA Financial Advice

I just graduated from graduate school and have a significant amount of debt. What is the best option of investment to help me pay off these loans?

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Congratulations, nmonmeil, that’s a big achievement. And from a financial perspective, I hope it will pay big dividend! Paying off your debt has it’s own rewards: more cash flow to save and invest, less stress, less money wasted in interest and overall, a clean financial slate.


In that context, I’m not sure that I understand your question about “investing to pay off debt.” While it can be tempting to get to that “clean slate,” I’d encourage you to take a balanced approach to knocking out your debt and investing for the future. Here’s a great example of what I’m talking about. Let’s say your employer has a 401(k) and offers a 5% match – if you contribute 5% to the plan, the employer will kick in an additional 5%. That’s likely an opportunity you don’t want to miss out on, even if it means you won’t have quite as much to put towards your student loan debt.


Create a plan and timeline to pay off your debt, be aggressive and stick to it, but don’t let paying off that debt sideline a lot of other foundational financial moves (building an emergency fund, acquiring and maintaining proper insurance, etc.). I know that’s not exactly answering your question, but I hope it helps! Good luck.

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