Chasing the Bull

We lasted reviewed our net worth in May. Financially, we were depressed and lost. Despite my financial background, we just did not have a plan that we could agree upon.

Enter Dave Ramsey.

Since we started attended Dave’s Financial Peace University, we have eliminated over $8,000 in credit card debt. I will tell you it has been extremely hard, and at times, almost impossible. We created a budget, tried to stick to it, re-worked the parts that blew up on us, and basically started acting like adults.

Even with our stock positions losing over $8,000 in the past 3 months, our net worth as climbed to $111,578. This is a direct result of eliminating our credit card debt (and not putting new charges on them) and staying within the budget on the rest of our spending.

Currently the only debt we have remaining is our house and my student loan ($10,277). The student loan really irritates me. I did get a degree with the money I received from Aunt Sallie Mae, but it is not the degree I am using now. Truly, besides the social aspects involved, my first degree was a waste of time, and therefore, the money spent to attain it was also a waste.

For now, we are at a crossroads. We basically have two choices, as I see it.
1. Continue to snowball the student loan. This would take approximately 18 months to pay off.
2. Pay the minimum payment towards Sallie and use the difference to fully fund our emergency fund. This would take approximately the same amount of time.

I know what Dave would tell us to do. Pay off the student loan first, then fully fund the emergency account. This is one of those times where we are going to deviate a tad from his plan.

I would feel more secure, as would my wife, if we saved up enough money to cover 3 to 6 months expenses before paying off the student loan. This would provide a small cushion against disasters. Additionally, since the student loan was consolidated a 4.25%, the interest will not kill us.

What do you think of this idea? I would love to hear from you!

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