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Hi everyone,

I have a question about where to temporarily store my savings from my first post-graduation job that will begin in a few weeks. Specifically, I'm wondering if I should store these funds in a savings account right away, or apply my monthly savings onto my student line of credit to reduce my monthly interest charges, and then move the lump sum saved into my savings account at the end of the year.

My goal is to create an emergency fund and put a little money away for a down payment (along with making monthly payments on my LOC as well). I want to take a balanced approach to paying off debt and saving. During my first year of work, I plan to set aside $20k for both an emergency fund and downpayment, which I will continue to grow in subsequent years.

I'm in a unique position because my professional student line of credit remains active with interest-only payments for 2 years after I graduate school. The interest rate is 2.45%, which is higher than the 2% interest I would make on my taxable savings account with EQ. For this reason, it makes the most sense to me to apply all of my extra cash onto that line of credit to lower the monthly interest payments, and then to move the $20k into my savings account before I lose access to the line of credit.

Does this plan make sense? Are there any additonal facotrs that I might be missing or might want to consider here?

Thanks in advance!
 

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From a pure numbers view it would be best to just to save for an emergency fund that would cover a few months expenses, and other than that pay down your debt. Your "savings" are not what is in your savings account, they are the sum of your savings accounts minus your debts. Instead of "saving for a downpayment" you would actually be extending the time before you are ready to make a downpayment.
 

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It seems to me that investing in precious metals or a deposit in a bank is a good way to protect your savings from inflation and this is not too risky.
 
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