Rushing to pay off student loans is a surprisingly common money regret.
Why?
Two reasons:
One is that typically the interest rate you’re paying is quite low, lower than you could earn with investing in the market. So instead of putting every extra dollar toward your student loan, you could invest it instead, continue to make the minimum payments, and end up further ahead over time.
A second reason is that lots of people feel like they have to put their entire life on hold until they get their loans paid off. No travel. No splurging. And they end up realizing too late that they missed chances to have fun while they were young because they were so focused on getting rid of their loans.
Now, that’s not to say paying off your loans quickly is a bad goal to have. For lots of people having debt of any kind is stressful, like a weight on their shoulders they carry around everywhere they go. That psychological burden is important to consider.
But just like with all financial planning, it’s important to look at the whole picture.
Rather than focusing solely on paying off your student debt as quickly as possible, it often makes sense to get started with investing (even if it’s just a small monthly amount at first) and to put money aside to do the things you want to do (even if it feels a little irresponsible when you still have debt).