College Savings Dave Ramsey
January 23rd, 2006
Question: So what do you think of my dilemma?
I just can’t figure out what to do.
I’ve gone thru and done everything according to Suze Orman (and read up on Dave Ramsey). I’m 25. I have my life Ins and my kid’s College fund taken care of. I own my car outright. My mortgage is 66,500 @ 6.375% My Student Loan is 1800@ 6.8%
My debt to Credit Ratio is healthy, way below 30% and I only owe 3000 @ 1.87%
My savings is 12k.
I know 8k is suppose to be my emergency fund… But I still haven’t funded my 5k to a Roth for 09! And I haven’t been able to bring up my Savings to 13k for the past 5 months.
What on earth do I do?
Answer: you are 25 — relax!!
you are doing great. A homeowner at @ 25 with everything else you are doing… WOW!!
I’ll put on my Suze Orman hat.
1. use the $1,800 in savings to pay your student loan
- yes, it will reduce your savings but the 6.8% is to high
2. Try to refy your mortage. Rates for good credit are less than 5%. If it’s not at least 1% difference, don’t bother. The fees will outweigh the benefits.
3. You have another 13 months to fund your 2009 roth (eligible to contribute until April 15, 2010). Put a little money away every week
- if you mean 2008 roth which must be contributed by April 15, 2009, you will need to make a decision based on your situation (job security, etc) if it is better to contribute to the roth or have the savings.
4. The credit card debt is fine. At 1.87% don’t worry about it. Just continue to pay over the maximum minimum amount and don’t max the card.
Go treat you & your kids to an ice cream sundae or something!
Dave Ramsey on College Planning
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Tags: 529, college, college savings dave ramsey, dave_ramsey, finance, investments