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At the end of 2007, I set out goals financially for us to achieve here.
Max out 401k - on track
Max out Roth IRA 2008 - done
Max out ESPP - done
Cash Flow $20k tuition - done
Not take out student loan of $8500 - debating
All cash month - done
It’s not yet the end of the year but I had to write this post. Mostly because we’re stuck. I did the all cash month in January and wrote about it here. Turns out I became even stingier than I ever imagined. I couldn’t, wouldn’t and hated spending any cash.
We finished our contributions to the Roth IRAs and right now we have $5k saved for 2009 Roth IRA contributions. I think we’re on track for that as well.
But we recently were approved of course for another $8500 Subsidized Stafford Student Loan for DH’s part-time MBA. Currently DH has $17k in Subsidized Stafford Loans from the previous two years of his program. We have managed to cash flow the rest of the tuition but it has been hefty @ $1142 per credit.
This coming year 2008-09 he will take 16 credits with the summer off. Unlike previous 2006-07 and 2007-08 where he took 26-30 credits for the whole year because he took a normal part-time load in the summer of 2 classes.
So we will only be paying $18k for tuition + fees + books + parking so $20k I think for 2 semesters. We’ve paid this for 2 years and it should be a cinch right? So what’s the problem? Why are we even considering taking out the loan when we have managed previously?
One major thing is that our fixed annual expenses have been increasing rapidly. Like I’ve mentioned in my post our gas has doubled from $80/month to $160/month budgeted. Last year as well we were spending $400/month on groceries, but I carefully pared it down to $200/month. Now it’s been slowly creeping back up though I’ve managed to stockpile non-perishables home supplies, dry and canned foods, and cooking from scratch.
Two, in the past 2 winters our heating and electric costs have skyrocketed. Over 40% increases in 1 years which leaves me worried about this coming winter. We already live with the temperature set at 50, wear lots of clothes, and are very energy conscious. We’ve made any improvements to insulate our home to be more energy efficient, and this summer we are planning on painting, plastering, and sealing cracks again. But I know costs are rising fast.
This combined with annual raises of 3% puts us in the position I think of having less money than we did 3 years ago when we moved into our current housing situation without tuition payments.
We hadn’t exactly planned out how we’d finance my DH’s tuition. Though I walked out of undergrad with student loans he didn’t. We didn’t even research what it would cost, because to both of us this degree is imperative to our future financial well being. I know we did discuss trying to find a public university but the wasn’t any other choice than the private university he chose.
So we’re stuck. We’re unsure if we should take out the loan or not. Is it in our best interest? I’ve been bouncing ideas off of people, and one thing is we could cash out all of our savings and go for it. We have an EF and the Roth IRA savings and we could make it. However there is a lot of risk involved with not having any safety net.
We could gamble on my DH’s bonus in March 2009. Right now he’s guaranteed company stock vesting of $5k I think, we haven’t thought or looked at it because unless we know he’s getting it we don’t count on it. Honestly it’s more of a surprise if it comes through. But we should we count on it? I have never budgeted money before that we didn’t have and feel a bit uncomfortable doing it. Right now the plans are just to save and have a larger EF in case a car dies or something happens.
Another option, unpalatable to my DH, is stopping savings for home and car repairs about $500/month. Because of the age of our home, 1880s victorian and 1999 and 2000 model cars, we feel it important to have cash to repair and maintain both. And trust me we’ve used it! This year we’ve spent $4k on the cars alone for normal maintanence, and $1k on the house with plans of spending another $4k for essential repairs to keep the house well insulated and in good shape. But this could be cut too.
Finally we could cut all miscellanous spending like eating out, entertainment, blow, gifts, etc. That might free up another $500/month. But my husband might be upset if I completely deprive him of everything, so I hesistate to get so drastic.
I’m not sure where I stand. My DH and I have discussed this a little and he’s hesistant as well to get into more debt. He debates whether we should stop saving for retirement and pay cash for his schooling?
But are there any pros to taking on the debt? Mostly it’s security in knowing we have lots of cash flow for emergencies. It’s being able to save money and really make sure we have an adequate EF, while not living drastically lean. Also it’s not too bad because my DH really has plans for fully utilizing his degree. He’s already been networking and has entered business competitions.
Because my DH is very dedicated, I feel his student loans have been absolutely essential to degree. He is not an undergrad searching for a job, he has a job in a field he likes and is broadening his horizons to have more of an impact in the field. He would love to be someone making the decisions one day.
Right now he does work full time and goes to school nights, so he can’t pick up another job. And I’m in school getting paid and I pick up all the slack for him being gone a lot. So I could pick up another job but I’m not supposed to according to my contract with the university.
Finally we paid in cash $15k in tuition since May. We haven’t taken out any private loans or unsubsidized Stafford loans either. But we do have $17k in student loans from his MBA currently. We are very aware of what we are doing hence the question. Most people are anti-debt on this board so I want know what are the pros and cons of taking out the loan or not taking out the loan is.
So should we deviate from our goals? I don’t know, weigh in, we’re listening. We have time to make a decision.
Max out 401k - on track
Max out Roth IRA 2008 - done
Max out ESPP - done
Cash Flow $20k tuition - done
Not take out student loan of $8500 - debating
All cash month - done
It’s not yet the end of the year but I had to write this post. Mostly because we’re stuck. I did the all cash month in January and wrote about it here. Turns out I became even stingier than I ever imagined. I couldn’t, wouldn’t and hated spending any cash.
We finished our contributions to the Roth IRAs and right now we have $5k saved for 2009 Roth IRA contributions. I think we’re on track for that as well.
But we recently were approved of course for another $8500 Subsidized Stafford Student Loan for DH’s part-time MBA. Currently DH has $17k in Subsidized Stafford Loans from the previous two years of his program. We have managed to cash flow the rest of the tuition but it has been hefty @ $1142 per credit.
This coming year 2008-09 he will take 16 credits with the summer off. Unlike previous 2006-07 and 2007-08 where he took 26-30 credits for the whole year because he took a normal part-time load in the summer of 2 classes.
So we will only be paying $18k for tuition + fees + books + parking so $20k I think for 2 semesters. We’ve paid this for 2 years and it should be a cinch right? So what’s the problem? Why are we even considering taking out the loan when we have managed previously?
One major thing is that our fixed annual expenses have been increasing rapidly. Like I’ve mentioned in my post our gas has doubled from $80/month to $160/month budgeted. Last year as well we were spending $400/month on groceries, but I carefully pared it down to $200/month. Now it’s been slowly creeping back up though I’ve managed to stockpile non-perishables home supplies, dry and canned foods, and cooking from scratch.
Two, in the past 2 winters our heating and electric costs have skyrocketed. Over 40% increases in 1 years which leaves me worried about this coming winter. We already live with the temperature set at 50, wear lots of clothes, and are very energy conscious. We’ve made any improvements to insulate our home to be more energy efficient, and this summer we are planning on painting, plastering, and sealing cracks again. But I know costs are rising fast.
This combined with annual raises of 3% puts us in the position I think of having less money than we did 3 years ago when we moved into our current housing situation without tuition payments.
We hadn’t exactly planned out how we’d finance my DH’s tuition. Though I walked out of undergrad with student loans he didn’t. We didn’t even research what it would cost, because to both of us this degree is imperative to our future financial well being. I know we did discuss trying to find a public university but the wasn’t any other choice than the private university he chose.
So we’re stuck. We’re unsure if we should take out the loan or not. Is it in our best interest? I’ve been bouncing ideas off of people, and one thing is we could cash out all of our savings and go for it. We have an EF and the Roth IRA savings and we could make it. However there is a lot of risk involved with not having any safety net.
We could gamble on my DH’s bonus in March 2009. Right now he’s guaranteed company stock vesting of $5k I think, we haven’t thought or looked at it because unless we know he’s getting it we don’t count on it. Honestly it’s more of a surprise if it comes through. But we should we count on it? I have never budgeted money before that we didn’t have and feel a bit uncomfortable doing it. Right now the plans are just to save and have a larger EF in case a car dies or something happens.
Another option, unpalatable to my DH, is stopping savings for home and car repairs about $500/month. Because of the age of our home, 1880s victorian and 1999 and 2000 model cars, we feel it important to have cash to repair and maintain both. And trust me we’ve used it! This year we’ve spent $4k on the cars alone for normal maintanence, and $1k on the house with plans of spending another $4k for essential repairs to keep the house well insulated and in good shape. But this could be cut too.
Finally we could cut all miscellanous spending like eating out, entertainment, blow, gifts, etc. That might free up another $500/month. But my husband might be upset if I completely deprive him of everything, so I hesistate to get so drastic.
I’m not sure where I stand. My DH and I have discussed this a little and he’s hesistant as well to get into more debt. He debates whether we should stop saving for retirement and pay cash for his schooling?
But are there any pros to taking on the debt? Mostly it’s security in knowing we have lots of cash flow for emergencies. It’s being able to save money and really make sure we have an adequate EF, while not living drastically lean. Also it’s not too bad because my DH really has plans for fully utilizing his degree. He’s already been networking and has entered business competitions.
Because my DH is very dedicated, I feel his student loans have been absolutely essential to degree. He is not an undergrad searching for a job, he has a job in a field he likes and is broadening his horizons to have more of an impact in the field. He would love to be someone making the decisions one day.
Right now he does work full time and goes to school nights, so he can’t pick up another job. And I’m in school getting paid and I pick up all the slack for him being gone a lot. So I could pick up another job but I’m not supposed to according to my contract with the university.
Finally we paid in cash $15k in tuition since May. We haven’t taken out any private loans or unsubsidized Stafford loans either. But we do have $17k in student loans from his MBA currently. We are very aware of what we are doing hence the question. Most people are anti-debt on this board so I want know what are the pros and cons of taking out the loan or not taking out the loan is.
So should we deviate from our goals? I don’t know, weigh in, we’re listening. We have time to make a decision.