<prompt> Human: Hi everyone. My husband just finished school, and his student loans are currently under a grace period until December. They are accruing interest, but payment is not due, and the payment will be calculated based on the balance at the end of the grace period. The current loan balance is 120k at 6. We have combined liquid assets of 60k, plus another 70k tied up in something that would be a fairly large loss if we were to sell it at present. I also own a home which we are renting out to cover the mortgageinsurancetaxes plus 300month over We also have 100k in retirement assets that we do not intend to touch. Our current monthly expenses including the mortgage and student loan payment based on current balance are 6300month, but this could be cut down to 5000 in an emergency. My husbands salary the rental income covers all of these expenses, and I am looking for a new job after our move, which should add 2500 net monthly. I am debating how much of our cash on hand to use to pay the loans down now, versus holding onto as an emergency fund. Id rather not be stuck paying too much in interest, but I am concerned about depleting our assets too much in case something were to happen job loss, loss of rental income, etc. Would the appropriate amount of emergency fund be six months current expenses, or the lower amount that expenses would be if we were to cut back? Should I consider the less liquid assets, and keep a smaller 3 month? emergency reserve?Thank you for your help.  <response>: How much to pay down student loans before grace period ends?If the interest rates are high above 3.4, as much as possible. You should not sacrifice your emergency fund, however.Would the appropriate amount of emergency fund be six months current expenses, or the lower amount that expenses would be if we were to cut back?Its whatever amount that lets you sleep at night. 6 months is a pretty decent-sized emergency fund IMO.Should I consider the less liquid assets, and keep a smaller 3 month? emergency reserve?Only if youre committed to selling them if things took a turn for the worst. 