Should I pay extra on my student loans or save for a down payment

With 5% student loans and a two year home goal, prioritize liquidity first. Put the full $400 into your emergency fund until you reach at least three months of expenses, given your job is steady but not guaranteed. Keep that money in a high yield savings account or rolling 3 month Treasury bills so it stays liquid and earns a bit. For example, if your expenses are $3,000 a month and you have $6,000 saved, you need about $3,000 more which would take roughly eight months at $400 per month.

After you hit three months, direct most of the $400 to the down payment fund and a smaller piece to the loans, such as $250 to savings and $150 to principal. That balances the guaranteed 5% you save on interest with the need for cash at closing plus moving costs, and it avoids being house poor. When you make extra loan payments, log in to your servicer and choose Apply to principal only or Do not advance due date so the $150 actually reduces principal. Turn on autopay for your federal loans to get the 0.25% rate reduction if your servicer offers it.

Six to nine months before you buy, check your lender's DTI treatment for student loans because some use the reported payment and others impute about 0.5% of the balance, so you can adjust by shifting a few months of the $400 more toward cash if approval looks tight. Aim to have at least four to six months of expenses set aside by the time you close since new homeowners run into surprise costs, even if that means accepting PMI and paying the loans down more slowly.

Been there with the 5% loans and the Zillow daydreams. I once tried to save for a down payment and then my car decided to audition for a smoke machine on the freeway, so I raided my "house fund" and cried into a burrito. Point is, liquidity saved me, not an extra chunk thrown at loans. With a job that's mostly steady but not promised, your first mission is cushioning the landing.

I'd treat the $400 in phases. Until you hit at least three months of expenses, push the bulk to the emergency fund, say around 300, and toss 100 to the down payment just to keep the habit alive, while only paying the loan minimums. After the emergency fund hits three months, flip it to something like 300 into the house fund and 100 extra to the loans, because 5 percent is real but buying power and cash reserves matter more right now. About six months before you plan to buy, pause extra loan payments and hoard cash for appraisal, inspection, closing costs, and a little post-move chaos cushion. Keep the savings in a high-yield account in its own bucket with a dramatic name so you do not accidentally spend it on concert tickets. And since these are federal loans, I would not refinance out of those protections until after you close, if ever.

Build the moat first, then the castle. With only two months saved and a two-year runway, go cash heavy now. Hit three months in the emergency fund fast, then shove most of the $400 toward the down payment and a small slice to extra loan principal for the guaranteed 5 percent win. Three to six months before buying, stop the extra loan trickle and pile cash for closing, moving, and the oh-no-the-fridge-died moment. Park the savings in a boring high-yield account and keep loan payments on time to guard your credit.

I remember when I was in your shoes, juggling student loans and dreaming of that first house, and let me tell you, it turned into this wild adventure where I accidentally paid off a parking ticket instead of my loan payment one month because I was so scatterbrained from all the creative projects I had going on. But seriously, with your federal loans at 5%, that's not the worst interest rate, so I'd say pump up that emergency fund first - aim for at least three to six months since your job isn't rock-solid, and use maybe $200 of that extra $400 for it to give yourself some breathing room.

Then, once that's beefier, split the rest between the loans and the down payment, like $100 to loans to chip away at that interest enthusiastically, and $100 to the house fund because owning a home is such an exciting milestone. I once saved for a down payment by selling quirky art pieces I made from recycled junk, and it added this fun chaotic energy to the whole process. You'll feel so empowered watching those savings grow.

Keep it positive and track everything with a fun app or journal - I've had mishaps where I forgot to log expenses and ended up buying too many art supplies, but turning it into a game made saving feel less like a chore and more like an adventure.

Dude, prioritize that emergency fund like it's your new best friend - two months is skimpy, so throw at least half your extra cash there to hit three or four months pronto, because life's full of plot twists. Once that's solid, divvy the rest between loans and house savings, maybe 60-40 favoring the down payment since homeownership dreams are worth the hustle. Witty tip: treat your student loans like that ex who won't stop texting - pay 'em off steadily but don't let them crash your party. And hey and with a steady job, you're already ahead of the game, just don't forget to celebrate small wins with a cheap coffee or something.

My brain scatters everywhere & so I just dump all extra into emergency fund first or I'll regret it when shit hits the fan.