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Ask Dave

Walking on thin ice

Justin is in the military. He and his wife are debt-free, but they're thinking about taking out a loan he says the Army will repay. Dave warns him not to do it.

QUESTION: Justin is in the military. He and his wife are debt-free and have $19,000 in their emergency fund. He’s currently in a Tuition Assistance (TA) graduate school program, so the Army is paying for everything and he gets active duty pay throughout. Justin and his wife are toying with the idea of taking out a $20,000 student loan and putting it into a savings account. When he graduates from the program, the Army would pay back the loan in two to four years. You already know Dave’s answer, don’t you?

ANSWER: No, thank you. No, no, no, no! Here’s the thing: That only works if it works. But if life happens, and things don’t play our exactly like you think they’re going to, you’ve got a mess on your hands.

I know you’re talking about sticking the money in a savings account and not touching it until it’s actually paid off, but what happens if someone gets really sick and you have to use the money for that? I’ve heard every story you could possibly hear about the whacky things that go wrong in people’s lives. Suddenly, their plan that was put together in a moment of sanity goes insane. Life happens, and it’s just not worth it. You’re walking out there on thin ice, praying it doesn’t crack. Don’t do it, man. You’re doing so good. Just stay right where you are; stay right on track. Don’t play games with stuff like that. It’s a real good way to get your tail in trouble. Please, please don’t do it!