Answer

I could use some help with financial advising. I am a 22 years old married college student and both my husband and I will be entering graduate school in the fall. We have a savings of $6,000 and a money market account worth $10,000. We have a $3,500 debt for student loans that has an interest rate of around 7%. Should be pay off the loan? What would be a small, wise investment to make for two young people just starting out without a lot of money? I would like to start thinking about the future and am not sure where to begin with money management. It is also difficult since we are mostly living off of borrowed money (student loans). I have been told to wait until after graduate school when we both have income but I know nothing about financial planning and don't want to start too late.

Congratulations to you and your husband on saving $16,000 on what is obviously a tight student budget. This is very admirable. You are probably earning a bit less than the 7% you are currently paying on the student loan. Since you owe only $3,500, yes, I would pay it off. This would still leave you with $12,500 in savings. If you want to pay off less, because of upcoming expenses in graduate school, that is fine too. This is a very low rate loan and you don't need to be in a great rush to pay it off (unlike 19% credit cards). As for future investments, I'd recommend a stock index fund with an automatic investment plan. This allows you to debit your bank account each month to purchase shares. Some funds will accept as little as $25. A good reference book about this is a new book called The Thrifty Investor by Craig Israelson. Other low-cost investments are EE or I savings bonds and Treasury bills. Good luck.