Should I use this money for a down payment on a new home or be debt free?

[Anonymous]

I have $80k in my savings and most of it comes from my home I sold in another state. I have no car payment and $76k in student loan debt. I want to be debt free and stay in my apartment, but my mom and my friends want me to break the lease and buy another house so I can “roll over my money into another investment and build generational wealth”.

If I use the money on the down payment for the new house, it’ll be about $40k, leaving $40k for savings. Or I can have no debt but only $4k in savings. What would you do in my situation? Are they right? I’m thinking I’d rather be debt free, have some peace, and take my time to buy a new house. I think need some time to explore my new city and state, make sure I’m living in the right part of town. I feel like a house would lock me down more. Sure it’d be easier to have company over, which I know they’d like too. But I’m just not sure.

[docster]

I would put the 80k in a Certificate of Deposit at the bank. I haven't checked lately, but let's say it gets 5 percent annual return and you have it set to pay out the interest to you monthly. That's $333 a month that can be applied to the student debt. Add just $167 to that out of your income per month ($500) means the debt will be paid off in about 13 years or so depending on the debts interest rate. You will still have the $80k which can be used for a house.

Stock mutual funds would pay off the debt faster but aren't FDIC insured.

[RoronoaZoro8]

You are better off clearing debt before making investments and you might not be able to borrow as much as a mortgage of you have a large outstanding debt.