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Ask Dave

Cash flow grad school?

Dan is in grad school. He and his wife have a good income and little debt. He asks Dave if cash flowing school from here on out is a good plan. Dave loves the idea, and he gives Dan a few pointers for making things work.

QUESTION: Dan in Tampa, FL, has a lot going on. He and his wife are on Baby Step 2, and he’s in graduate school while working full-time. They’re trying to cash flow his education from this point forward after previously taking out student loans. Their household income is $90,000 a year, and they have a car payment, so Dan asks Dave if they’re taking the correct approach.

ANSWER: Lay your finances out, and run the idea of what tuition and school are going to cost between now and when you graduate. Your first goal is to do no more harm, meaning that you graduate and finish this degree without taking on any more debt.

I think beyond that, and I don’t know what you’re paying for the school, you should have some money beyond that to work your debt snowball. Don’t beef up the payments on your debt so heavily that you use up the money that you need for tuition. Getting though school will slow down your debt snowball somewhat. So don’t get so excited and gazelle intense about paying off your debts that you pay down so heavily on the car that you turn around and have to borrow for tuition.

First goal is to finish school without any additional debt. The second goal is to throw whatever else you can scrape up at the debt. Yeah, I’d definitely do that. It’ll work for you. Congratulations! That’s really neat. Very good idea.


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