Using student loan money for other purposes... - Page 2

[SeekingJoy]

Would I do it? No.

Is it a bad idea? Yes.

I wouldn't even use it as an emergency fund. Instead, it makes more sense to take pp advice to separate business and personal accounts and then tighten both budgets.

[Maluhia]

Nope, I'd get serious about living within your means before taking on debt to have "savings." That is not savings, it is just not.

I'm sure this is not what you want to hear, but clear out it's bad financial decision making to take on more debt in your situation, period.

[1growingsprout]

NO for all the above mentioned reasons...
Plus do you have any idea how you are going to be paying this student loan back? Do you know what the actual 'cost' of the SL is? meaning the total you are going to end up paying with interest, fees, etc over the life of the loan? I bet after you get those numbers you wont want that extra 12k

[Doodlebugsmom]

I wouldn't do it. Dh and I finally got almost all of our consumer debt (other than mortgage) paid off. I'm going back to school now, and it would be nice to put several thousand into an emergency fund. I won't accept more than the cost of my tuition and a little for books. Thankfully, I go to an inexpensive school. (WVU) Tuition is only about 2500/semester for undergrad and 3000/semester for grad school.

[Amila]

Sigh, you guys are right. Now I am not even sure if I should take out the loan at ALL. I mean, the Master's would be in health and wellness with a concentration in lactation consulting. But you are right in that I don't know what kind of job I would be able to get with it.

We did NOT pursue buying a bigger house, instead we refinanced our mortgage from 6.5 to 5% without getting any money back.

We have been taking day trips or small cheap or free local weekend vacations (like up to our friend's cabin).

We haven't been going out to dinner NEARLY as much at all

I have been trying hard to keep the spending at a minimum

Unfortunately for some reason we have been spending a TON on food- like $250/week. I am going to try my best to work on this, Thats ridiculous.

I have been driving less and only filling up 1x/week.

[ell]

If you are already in debt and have no plan to manage the money, then no, I wouldn't take it. I know this sounds harsh, but I think this will simply get you in to worse trouble than you're already in.

[chiromamma]

Originally Posted by Amila

We don't really have a firm budget in place...we live day to day, as the money comes in...it sucks! We literally spend the money before it comes in, as is the nature of my DH's work. Ware in the early years of his business, and we took on way too much at one time. So we are in a bad spot. We pay our monthly bills, we eat well, we do fun stuff here and there. But we are living on the edge of the cliff, so to speak. It would ease my mind SO much to have a cushion- even just one months worth of bills- in case of an emergency. I feel like this is our only chance to do that. We recently refinanced for a better rate, but didn't have enough equity to get money back.

We are sole proprietors as well. I understand how you live sort of month to month. Definitely feels at the edge of a cliff at times. We relied on credit cards to take up the slack. I also have a substantial student loan debt from grad school. Once we got rid of the credit cards, we had to create a livable budget. Right now we are living below our means so we can have an emergency fund.
I'd advise you to create a serious budget and stick to it. Find every way you can to cut your expenses. As small business owners in a depression, it is the only thing to do. Don't get sucked into the debt trap. Can you work part-time while you're going to school?
Honestly, if it were me, I'd consider putting off grad school until my financial situation were more stable and my kids were older. People are coming out of college with crushing debt right now with no employment opportunities.

[Magpie1972]

I would not do it, but I don't think I could live "day-to-day" like that either. It'd make me nutty.

I think it'll just make you deeper in debt based on what you've said here.

[Mosaic]

It does not make sense to take out money at 6-8% interest and put it into an emergency savings fund where you'd be lucky to earn half that. This plan would *cost* you more money.

Instead, you should look into purchasing short-term disability if you feel that you're one accident away from disaster. It would cover you for much longer and cost less in the big picture.

[shayinme]

Originally Posted by Amila

Sigh, you guys are right. Now I am not even sure if I should take out the loan at ALL. I mean, the Master's would be in health and wellness with a concentration in lactation consulting. But you are right in that I don't know what kind of job I would be able to get with it.

I definitely would not take out that kind of cash for such a degree. I seriously doubt the ROI would be worth it. I know a few lactation consultants and I doubt they make a lot of cash.

I did my undergraduate degree is health & wellness focusing on African-Americans and I loved my program but it was one of the reasons I went to grad school and got a more practical degree. Its an M.Ed.

I think I recall some of your earlier posts and it sounds like you really need to get your spending under control. Look, you got no judgement from me, I am a recovering shopaholic. In the early years of my marriage, I used to shop for sport, we were making almost 6 figures amd saving nothing.

Sadly our lives and income changed and I am forced to live more modestlly, but I still struggle. Back then I didn't have any internet and boards like this to get advice, maybe if I did I would be better off financially and credit wise.

Back to your schooling, I personally would only do a program like that if I were paying out of pocket.

Shay

[karne]

Originally Posted by shayinme

Back to your schooling, I personally would only do a program like that if I were paying out of pocket.

I have to say, I really agree with this. It's so important to look at the career you want and be clear about whether the $$$ for grad school, or certificate programs, etc., is justified. As Shay mentioned above, her grad degree of an M. ED. was more practical for her. We've had this experience as well. Dh and I both have grad degrees, and we have very specific interests. However, our grad degrees are broad enough to allow us to move around in our fields. We both absolutely need grad degrees to work in our fields but I know that our different grad schools have been hosting a lot of discussion of the cost of school versus the salary that can be expected upon graduation. Just some OT food for thought.

[goodygumdrops]

If you google salaries for Lactation Consultants, average income is 65,000. Most Lactation Consultants that make this income are likely RN's. There is thread about it in Birth Professionals.

[weliveintheforest]

Originally Posted by AuntNi

Don't swap your unsecured credit card debt for student loan debt that can follow you to the grave.

I agree with this But I can see why it's tempting.


Good luck with your decisions, I don't know what I'd do.

[bender]

I did something like this with my undergrad, and it worked out well for me. However, the interest rate on the loan was lower than what I was able to invest the money at, so I ended up being ahead when I graduated. I was able to pay the loan off and have the earned interest as a bonus.

I wouldn't do it if you're just going to put the money in a savings account. You end up paying 6% interest to earn 1% interest from your bank. Not to mention, sometimes having the money in the bank makes it easier to spend the money without thinking about it.