Are student loans considered debt or just monthly payments in a budget?

Seeking Advice Forum
1

Are student loans not considered as part of your debt and instead as a monthly payment when making a budget?

2

Student loans are still debt, so they are considered debt. Much like your mortgage or a car loan.

3

So do they appear in the budget twice? Or just in the debt section?

4

FrugalFoodies1 said:
So do they appear in the budget twice? Or just in the debt section?

Budget = Cash Flow (income and expenses). Debt is a balance sheet item (assets and liabilities). Your student debt should only show once in your budget as the payment you plan to make each month.

5

Thank you! Should I have both a budget and a balance sheet? For someone trying to achieve financial stability, is there anything else I should be looking into?

6

FrugalFoodies1 said:
Thank you! Should I have both a budget and a balance sheet? For someone trying to achieve financial stability, is there anything else I should be looking into?

You can do both, but focus on the budget first. Balance sheets are reviewed occasionally; budgets are your financial plan.

7

I also split loan payments between interest expense and principal. Likewise, pensions are an asset.

8

Are 401k and 403b assets?

9

FrugalFoodies1 said:
Are 401k and 403b assets?

It depends on if your aim is to pay minimums or to aggressively pay down debt. High-interest debt should be prioritized, especially in your 20s for compound growth in retirement accounts.