Tuesday, October 16, 2007

Payoff Complete - Ideas on Education

Well, the payoff's finally complete. With the advent of electronic banking, I've been paying many of my bills using my bank's online bill pay. I like the convenience of knowing exactly when the amount is going to hit my account. This is easy to plan since most of my bills that are paid this way are actually paid as an electronic debit instead of a check. However, for some institutions this might not be possible and therefore a check will be cut. So, for your situation, mileage may vary on online bill pay.

But when it comes to my student loan/credit card payoff which happened this week, it is a great feature. I scheduled the payment and I knew exactly when the money would hit my account. Now the bill is completely paid off and has given me even more wiggle room in terms of my measurement of free cash flow on a monthly basis.

The key here is what to do with the free cash flow. Currently, it appears that I will be doing some sort of a three-way split with the funds. I plan on increasing my retirement contributions. Furthermore, I plan on increasing my pay downs on other bills and also increasing my savings rate. The hope is that the car loan will also be paid off early which should help me accelerate even faster toward critical mass in terms of my finances.

I'm immensely proud of my accomplishment. Going to school and having to repay some serious student loan debt is a big incentive to make good decisions in school and with your money.

I think that this payoff is one of the main reasons why I feel somewhat annoyed at some people who get into professions that cannot pay the bills. In the end, the reason that everyone cannot be a basket weaver is that there are too many of them already so that the salary for this job ends up being low.

Please, before you get yourself into serious student loan debt, check out the salaries for the jobs that you will be getting. And check the availability of such jobs. One really good paying job in a field in a city isn't enough if there will be 40 graduates. Also do what you can to provide yourself an 'escape hatch' into either other related jobs or other fields (perhaps a double major or a minor?) so that you can get other jobs if your first choice doesn't work out.

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