Wednesday, May 23, 2007
Doing Well - An Update
I've had a bit of an absence here blogging, but that seems to happen every time I start a new blog. I get bored with it or run out of things to say. While I have gotten bored with blogging, I haven't gotten bored with reducing my debt or with personal finance.
Delegating more money to debt has become easier now that the wife has a full-time job. What's more important is that she comes home happy every day. No job paying any amount of money is worth it if you come home grouchy and angry every day. While I do wish she was making more money, I am more concerned with her enjoying what she does.
As for me, I generated some extra income by selling my old umpire equipment on eBay. That brought in an extra $250 or so. While that is nowhere near what I paid for it, it did generate income while I was using it. By my calculations, I probably made about 50% back on the amount I paid for it all brand new.
I've also enrolled in college for the upcoming Fall semester. I applied for a pell grant, but was not eligible. However I did get two grants worth about $2,000 total for both the Fall and Spring. The remaining balance will be repaid using student loans. I do receive tuition reimbursement through work, so it will get paid back once I receive that money. Well, I shouldn't say that. I can't decide if I should use the tuition reimbursement towards my credit card debt. All in all it will just be a "balance transfer" to a student loan.
While the student loan won't need to be paid until I graduate, it will continue to accrue interest, which I believe is probably around the rates I have now. Maybe I should just pay it on the private student loans I took out a couple years ago that were put to absolutely no use.
Looking for comments on what I should do.....
Absolutely use the reimbursement toward your credit debt. If you can pay down your credit debt with your student loan while resisting the temptation to use credit cards to buy the books and food that the reimbursement would otherwise go toward, then you're in much better shape transferring your high-APR "bad debt" to low- and fixed-APR "good debt." Student debt will never go away, even in bankruptcy, but you can always defer payments while enrolled half-time, unemployed, underemployed, or volunteering and you can get forbearances if you so need. These options just aren't available for credit debt.
Then there's the effect on your overall credit rating. Student debt is widely regarded as a valuable investment, while credit debt is understood to reflect poor financial decision making.
So if you have the opportunity to reduce your bad debt via good debt, I recommend it.
Daniel
:
5/23/2007 7:17 AM 
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