Help me spend my singing bonus!
Apologies for the misleading title, this is more of a personal finance question.
I'm a 2Y MBA student at a good school, blah blah. I'm financing bschool & associated living/drinking/traveling expenses through student loans. This is the only debt I have. Most is with private lenders, although some is through federal loans. The federal loans do not currently accrue interest so I don't intend to repay them in the near future. I was fortunate to secure a full time offer which came with a meaningful signing bonus. Curious how others navigated similar situations. My primary concerns are (i) personal cash needs for "life events" and (ii) delay of start date given uncertain markets. Here are the options I see:
- Keep it all, stash into a HYS account or something safe-ish. Frankly I (hope) I would not be able to spend much of it during school, since my semester is currently covered by a loan. Effectively, I will be losing the spread on (avg loan interest - savings interest). Start repaying loans when I start getting consistent cash flow, accelerate loan repayment depending on other life expenses and cash needs.
- Pay off a chunk of higher-interest loan, keep some cash in the bank. Start accelerating repayment when big boy job starts.
- Pay off as much of the loans as I can, accounting for life needs through the next year. My networth wouldn't change, but my ultimate "total interest paid" would be reduced significantly. The downside is that it would wipe out any emergency funds I think I have.
Interested to hear how others spent/saved their signing bonuses.