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First Step in Plan B

July 30th, 2009 at 12:19 pm

So I've read the first two chapters of Dave Ramsey's book

And the biggest thing that stuck out to me was about not borrowing your way out of debt. Debt just doesn't make sense at all.

In August, I was planning on receiving $9568 in student loans which $2000 would go to tuition and the other would go towards paying off/down my other CC card.

So today I asked myself if restructuring the debt (CC debt into student loan debt) - was really a good idea.

The CC debt is CC debt even if I put it into a student loan. However, if I'm not PAYING on a CC bill - I could delude myself into thinking "Oh, its just a student loan - it's good debt"

SO I'm not going to take out the student loans.

But I'm wondering... its still $2000 I need to come up with. Do I take my $1000 EF and use that to pay towards my tuition and pay off the other $1000 in September? If I don't take SL out then I should have my EF back to $1000 in a month or so.

Thankfully I graduate this December =)

Trying this plan may definitely take me some time to adjust to... but I'm promising myself to stay committed. The good news is I'll have my AMEX paid off next month regardless of student loans or not.

THAT I'm doing completely on my own without having to restructure debt.

Posted in Uncategorized | 4 Comments »

4 Responses to “First Step in Plan B”

  1. creditcardfree Says:
    July 30th, 2009 at 01:46 pm 1248961594
    1248961594

    I admit, I'm a fan of Dave Ramsey. I haven't followed him to the letter, but I think he has a great plan in place.

    I think your plan for tuition is excellent! Debt is debt, no matter how you look at it.

    DR's website has archives of previous radio shows. You can listen to him all day long if you wanted to keep yourself motivated.

  2. zetta Says:
    July 30th, 2009 at 06:53 pm 1248980017
    1248980017

    Restructuring CC debt into student loan debt is probably not a good idea, and it would be ideal if you can pay your tuition as you go.

    However, if you do not have another way to come up with $2,000 for your tuition, taking out a $2,000 student loan is an appropriate use of debt -- better than say putting $2,000 on a CC that would have a higher interest rate than the loan.

    Or if paying cash for your tuition means it takes longer to pay off the other CC's that have a higher rate, it would make more sense to take out the student loan, aggressively pay off the CC's, and then tackle the student loan.

  3. zetta Says:
    July 30th, 2009 at 06:55 pm 1248980148
    1248980148

    Also, I would advise you to keep that $1,000 EF. If you have an emergency, the EF will keep you from having to charge it to a CC.

  4. No Pain | No Gain Says:
    July 30th, 2009 at 07:00 pm 1248980411
    1248980411

    Remember, you can take out only what you need! Smile If all you need is 2K, ask not for a dime more! Congrats! I just graduated with my undergrad and am now in my 3rd class of my MBA! Fun stuff!

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