Monday, July 28, 2008

A few things on my mind...part 3 of 3...

I think I'll be dividing this up into three parts - just 3 very different things to talk about regarding money. This is part 3.

The other thing I'm worried about and seem to be thinking constantly about is the shape of the economy and our debt. It looks like we're headed into a time period of high(er) inflation and not-so-great GDP...possibly stagflation like in the 1970's. That would suck.

If you look at inflation numbers and really see what they're saying, we're looking at 10-13% inflation on many goods over the course of the last 12 months. That's scary.

I really don't like going into this with so much consumer debt. It bothers me. And yet, there's little we can do about it that we aren't already doing. We're on a budget. We're working on paying it all off as soon as we can. We aren't adding to the debt.

I'm returning to school in January, which will change things somewhat. It will put my student loans in deferral, opening up another $220 to send to the cc's. It will also open up more money coming in as I move across the salary schedule. My lane will change in January for more pay because I'm taking an online class this fall (teacherspeak for: about another $100 a month or so come January).

We're also (and this moves away from those of you who are ardent, totally follow-the-line Dave Ramsey...) taking out more student loans for me to work on my PhD. We talked long and hard on this, thought it over, and then talked some more. The overdraw on the student loan will allow us to pay off the consumer debt faster, at a lower interest rate which is deductible. I realize this is not terrific, but it will allow us to get the cc's gone faster, as well as the car loan. It will increase our overall student loan debt to a LOT more than what I'd like, but that's the choice we're making. The interest rate is at 2%, it's all one payment, and it's tax deductible.

It will probably put our student loan over $100,000. It will allow us to move through things a little differently, and a little more quickly.

We will probably move this to the BS while paying on the house. Again, not necessarily totally DR-esque, but that's our choice. If we could get the cc's paid off and not use them anymore, we'd be in a lot better shape than many.

Yes, it sounds as if we're justifying. I'm not posting this info on the message board, because I know what will happen. I've always been a believer in taking the plan and making it work for your family, in your situation. This works for us.

Maybe I won't feel like I'm drowning anymore. Maybe it will get worse - after all, we'll owe more on the student loans than on the house. Crazy!

And we'll still sell and send extra - just have more breathing room. And if the cc's are paid off but there's still offers for overage on the student loans, we don't have to take it. We probably will, but we do have the option.

Ugh. Debt depresses me. It's so hard to see a way out.

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