<prompt> Human: Hi all,My fiancé and I both late 20s both recently finished grad school and have reached the point where were comfortable in our jobs and are starting to plan for the future. However, we have a slightly unusual situation in that we have a massive amount of student loan debt but also relatively high incomes. Were looking at buying a new car in the next few months and a home in 2016, and Im basically wondering if were in a situation to consider a new car or home and just how good or bad our situation really is. This sub has been very helpful reading so Im hoping for a realistic outside opinion on our situation. ASSETS AND LIABILITIES270,000 in federal student loan debt. 6.5 IR on most, 7.5 on some. All loans on IBR. No other debt36,000 401k 45,000 cash emergency fundfuture down payment 30,000 taxable investmentsINCOME 280,000 gross annual salary 10 bonus at year end. Salary should increase about 30,000 per year at our current jobs. 13,500 monthly salary net of tax, health insurance, and max 401k contributions. This does not include bonuses, most of which go to loans or investment.EXPENSESOur monthly budget ends up around 9,000 in total expenses per month. This includes 4,000 in student loan payments, which is more than our minimums on the IBR plan. It also includes a monthly value of any annual budget expenses, such as travel. That leaves about 4,500 that either goes to savings towards a down payment in cash or investment accounts, or can be put towards high IR loans. QUESTIONSWere considering two major purchases in the next year:NEW CARWe both need cars to get to work. Both of our current cars are fully paid off. Our newer car is a 4 year old small suv. Runs well and gets reasonable gas mileage. Our older car is a 15 year old large SUV. Probably worth about 4k. Gas mileage is about 16 mpg in a daily 1.5 hour25 mile round trip commute. 160,000 miles. No major engine or transmission problems, but needs new tires, brakes, and suspension to get through a few more years if the engine and trans holds out. Were considering trading in the older suv for a new small hatchback around the 25-29k range. Wed probably end up financing about 20-22k at around 1-2 for 3 years. We obviously have the cash flow to handle the increase in payments, but is it unreasonable to take on the additional debt?HOME PURCHASEWe currently rent for 1700 a month. The only additional cost is 75 per month in utilities. Wed like to buy a home about one year from now when our lease expires. I think we can have about 100,000 down payment saved by that point without totally raiding our emergency fund. That would be around 20 on the houses were looking at. Are both of these purchases within reason at our debt and income levels? Ive recently taken a greater interest in our finances after realizing that paying off our debt is actually a reasonable possibility, and dont want to make any mistakes.  <response>: It depends on you value most.For me I rented while I paid off my debt 105K and am driving a 8 year old car. My reason for doing this is that I wanted to have the most cash available to save towards big goals like home ownership. I want to be able to afford what I want, when I want without prior expenses getting in the way.I agree with uanyadualla and I am sure if you wanted to get real aggressive with it you could put even more towards your loans to get them paid even sooner. Then you can focus on the down payment. I am to the point where my down payment could be almost 50 of the house I want to buy and it is still growing.Beware of the thoughts that sometimes drive less than favorable financial decisions: We make this much money so we SHOULD be driving newer cars, even though our cars are still working. We are at the age we SHOULD be in a home. There is plenty of time to build equity.Dont do things because society says you SHOULD. Do them because they are align with the financial goals you and your family have set. 