Time for another of Life's Goals.
I'd like to pay off my Student Loans by the time I am 33. I'm 28 right now. That gives me 5 years to pay down $37,114. That seems like a CRAZY idea. Maybe it is. Let's review the Pros and Cons of paying them off early.
Pros:
1. Did I mention Graduate Student Loans rate of 6.8%?!?! These guys will be attacked first.
2. Peace of Mind. At 33, I'd be able to take the money spent on education and start saving for my kids education or take the family on a vacation or buy some nice jewelry for my loving wife!
Cons:
1. They are in deferment right now. So, technically there is no payment due on them, but interest is accruing at 6.8%. I could stock pile cash now while the option is available.
2. Student Loan Interest Deduction - Tax deduction on every penny of interest I pay. This is nice - but not a valid reason to keep debt.
The Pros win. Shocking, I know. #1 is a good argument, but Pro #2 is the knockout blow. It will require some sacrificing now, especially since I haven't earned my MBA and the potential new job and income (fingers crossed), but since it's just the Prof and I right now - I know we can do it. Here is my plan:
Now thru Dec 2012 - $500 at Graduate Student Loans. In 2013 - We ramp it up to $600. Then in 2014 - We ramp it up again to $700. These incremental increases won't have a severe impact on our budget, but they will have more profound impact on the principal balance. Also - I'd like to put half of any Side Hustle money at this balance with the other half going to the Prof's new car. She deserves nice things for all her sacrificing.
By the end of 2014 - the balance will be around half of what is now. At that time - I'll have graduated won't have to worry about education expenses so we can review. However, I feel better having a plan in place. Especially since the Prof and I have adequate "emergency" funds and are saving quite a bit. We have big dreams and like to enjoy life, but we've been smart and I know we will continue to be so.
I'd like to pay off my Student Loans by the time I am 33. I'm 28 right now. That gives me 5 years to pay down $37,114. That seems like a CRAZY idea. Maybe it is. Let's review the Pros and Cons of paying them off early.
Pros:
1. Did I mention Graduate Student Loans rate of 6.8%?!?! These guys will be attacked first.
2. Peace of Mind. At 33, I'd be able to take the money spent on education and start saving for my kids education or take the family on a vacation or buy some nice jewelry for my loving wife!
Cons:
1. They are in deferment right now. So, technically there is no payment due on them, but interest is accruing at 6.8%. I could stock pile cash now while the option is available.
2. Student Loan Interest Deduction - Tax deduction on every penny of interest I pay. This is nice - but not a valid reason to keep debt.
The Pros win. Shocking, I know. #1 is a good argument, but Pro #2 is the knockout blow. It will require some sacrificing now, especially since I haven't earned my MBA and the potential new job and income (fingers crossed), but since it's just the Prof and I right now - I know we can do it. Here is my plan:
Now thru Dec 2012 - $500 at Graduate Student Loans. In 2013 - We ramp it up to $600. Then in 2014 - We ramp it up again to $700. These incremental increases won't have a severe impact on our budget, but they will have more profound impact on the principal balance. Also - I'd like to put half of any Side Hustle money at this balance with the other half going to the Prof's new car. She deserves nice things for all her sacrificing.
By the end of 2014 - the balance will be around half of what is now. At that time - I'll have graduated won't have to worry about education expenses so we can review. However, I feel better having a plan in place. Especially since the Prof and I have adequate "emergency" funds and are saving quite a bit. We have big dreams and like to enjoy life, but we've been smart and I know we will continue to be so.
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