Assuming you have 3K saved, I would start putting more towards your loans assuming your job is pretty stable and the interest rate on your loans is more than 3%. You could probably cover 3 months or more of expenses with the emergency fund you have now, and its likely in a savings account or CD where you aren't earning much in interest. So really, you are just losing money in interest by holding on to a such large pot. If it were me, I would continue to save $100 a month towards the savings but the extra $200 towards the loans. No reason you can't work on both at the same time!

First of all, it looks like you are doing great already and that you are just looking to fine-tune your personal finance strategy. I wholeheartedly applaud you :)

I have a degree in finance (and the student loans that came with that deal), so I take a more technical approach to these types of situations. Allocating your income involves examining how you are equipped to deal with financial risks, should they happen.

It's going to vary from individual to individual. Three major things to consider, and that you have already considered to some degree, are 1) your "real" financial situation; 2) how risky maintaining student loans is to your lifestyle; and 3) your health insurance.

What's your real financial situation? As your job/income is stable, this is more of a people matter for you. If your financial situation became precarious, do you have people who will step in to help you financially until you get back your feet? If yes, then the emergency fund becomes less of a priority. If no, or if you do not want to accept help, then your emergency fund becomes very important.

Next, consider the risk of having student loans. The risk is the possibility of encountering a financially hazardous situation that will render you unable to cover your monthly payments (so, if your monthly payments are higher, your risk will be higher than someone who has lower monthly payments). Do you want to maintain low-grade financial risk and pay more interest in the long term so that you can use your money in different ways now, or would you rather eliminate the risk as quickly as you can?

Personally, I have no problem living like a pauper so that I can eliminate the risk as quickly as I can. Also, my monthly payments are higher than yours, so I currently face more risk than you do. But I've always kind of lived like a pauper so it's not really a downgrade in lifestyle for me.

Finally, is your health insurance plan comprehensive? If it doesn't protect you that much, you will want to put more money into the emergency fund to compensate.

Again, I really think that you are doing fantastic as it is, and fine-tuning it a little here or there is only going to help you out a little because you are already doing so great.

Good luck! :)

Spmcavoy I'm dealing with literally the same exact issue. I pay over $800 in student loans plus my car payment, commuting expenses, living expenses and I stll live at home so I'm not paying rent. I plan on moving in with my boyfriend soon which is making me a bit anxious because everything that I save from my paycheck will be going towards rent.

I think I agree with you that the emergency fun needs to be saved up a bit before we can throw any extra money into our student loans. I keep looking for articles about this issue and haven't really been able to find too much so I was so happy to come across your post.

Lots of luck to you!!

@Spmcavoy, This is the perfect place to vent. I think family expectations about money/spending are always hard. Perhaps you can set a budget with your mom about how much you can contribute and then politely refuse any requests beyond that.