Cash in EE bonds to pay off debt? Dave likes the idea, and he walks Patrick through the steps that will move him closer to financial peace.Show Transcript
QUESTION: Patrick asks if he should cash in some EE bonds, and use the money to pay off his school loans and get rid of a truck he can’t afford. Dave thinks it’s a great idea, and he walks Patrick through the steps he should take to begin gaining control of his money.
ANSWER: The bonds might be taxed, but it won’t be much to worry about. EE bonds make less than one percent, so you haven’t really earned much. Those things are a horrible investment.
A $30,000 truck doesn’t work with a $50,000 income. So, cash in the bonds immediately, sell the truck, and use some of the money from the EE bonds to pay off the school loans. Then, find yourself a cheap, little truck that will get you around for a few years.
You can do this, Patrick. I want you to have a nice truck one day, but I don’t want that truck to be a burden. This one’s got you by the throat, and you’re feeling it, aren’t you?
Drive like no one else for a little while now, so that later you can really drive like no one else.