Exciting news and advice needed
Well, I did something yesterday that will seem a bit impulsive to my readers (all 13 of them) who've known me for these few short months, but I assure you it wasn't. I signed up for the Certificate in Professional Investigation class at a nearby university. Private investigation has been an interest of mine for many years--I've saved newspaper articles, etc., and even attempted to take an adult education classes on the topic before, but it got cancelled. (I think it's the same interest that leads me to the FBI and CIA websites every couple of years, too, only I'm not sure I'd want to work for either of those groups--and at 34, I'm likely too old in their eyes.)
So, yesterday I was reading our town paper, and there was an article about this program. I suddenly felt like I really, really wanted to enroll. I looked at the website, talked to J about it, and we decided I should go for it. I signed up. I then attempted to go to bed, only I was so excited that I lay awake for hours.
Here's where I'll stop talking about the "whys" and instead, readers, ask your advice on the financial aspects. The class cost $4995. I was only able to pay via credit card or check, and due to another issue that I haven't yet brought up but will soon, we definitely want to build up our cash cushion comprising 3 month's worth of living expenses. So, I put it on my credit card.
Last night, among other things, I was thinking about "creative" ways I could ease the financial burden. I thought of stopping contributions to my retirement plan for 6 months (bearing in mind that my employer still socks away the equivalent of 5% of my income for me gratis--no match required), and instead using that money to pay down my credit card. That means that in 6 months I'll be in roughly the same place debt-wise that I was before I signed up for the class.
Meanwhile, I plan on shopping around for another card offering 0%APR on balance transfers, when my current 0% card "expires" in March. If I can't get another credit card, I plan on starting a "bidding war" between my two current credit card companies. No guarantees about what will happen with that, so as you imagine, I'm mainly interested in getting the balance paid down.
At any rate, I feel better about putting this kind of debt on my credit card than what I have on the past--kitchen upgrades, LASIK, furniture. This feels like "good debt."
What do you folks think of my idea about my retirement plan? Any other comments/suggestions?
posted by SMB @ 9:55 AM
5 Comments:
I'd consider an investment in your future "good debt", but you might want to look for other ways to pay it off than by slowing down retirement funding (think of the long term cost of that, tax consequences etc)
Can you sell some items or find a way to earn that money (providing services to friends and neighbors in off hours?) or can you start the course after you have saved up at least some of the cost? (though it sounds like you already paid for the class).
It sounds like a great program for you if you are so passionate about the topic, but I wonder if there aren't more "creative" ways to fund it other than halting tax-deferred retirement savings. If not, I say still go for it ;)
I am with Caitlin on this one. If you can figure out a way to pay off this debt without suspending your 401(k) contribution that would be best. If you feel that you really need to suspend the contribution to raise the cash then go ahead. But keep this debt first and foremost in your mind. As you come across extra dollars (cash gifts, eBay sales, bonus $'s, overtime $'s, focus group $'s, etc., etc) put those dollars toward your debt and make getting back to contributing to your 401(k) a priority.
The course does look very interesting and I can understand your wanting to take it. I love reading mysteries and my favorites always have female investigators (Kinsey Milhone rocks!) But while you seem more likely to actually do something about your passion, Mine is satisfied with something as little as watching a Veronica Mars episode :)
Good Luck!
Even though I believe in education regardless of the cost, I'd weigh the value of the PI class and what you want to do with it in the future. If you know yourself well enough to establish that it's not just a phase and you'll make something real of it, do it, charge it, whatever.
If it's a course in "underwater basket weaving" and you'll never use it, don't do it.
I'd start by buying a few books. I've learned Spanish and ASP.NET for under $100 in books, while some of my friends don't know either after taking college courses.
Tough call, but I lean in the direction of Caitlin and Jane on this. The money you invest today in a retirement plan can't be made up. However, the class is an investment in yourself.
If you can get the balance on a 12 month 0% card, then it looks like you would only have to cut your retirement contribution in half--so you wouldn't be paying interest and you would still be contributing something in addition to your employer.
It's great that you're finally doing something that you've wanted to do for a long time. My big dream is more expensive than yours--a fiction-writing MFA. But private investigators probably make more money than novelists, so you have a better chance of recouping your $$.
Any chance you could get a student loan to cover this? The interest is tax deductible, and much lower than a CC interest (altho not lower than a 0% balance transfer).
It sounds like we have something in common. Just because I write a personal finance blog, and haunt the discussion boards, doesn't mean I've got myself totally under control. My problem is spending the "emergency fund" on things that aren't real emergencies. I impulse-bought 3 plane tickets to Baton Rouge last week. We had been planning to go, but we really don't have the $$. But M's grandmother will be 89 this year and we want to visit her again while she's still in her own house. That money is going to come out of my emergency fund.
So maybe after this purchase you should cut up the credit cards, and I should cut up the access code to my ING account!
But still, I think you made the right choice.
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