Sunday, October 14, 2007

What should I do with my financial aid money?

I spent money today, but it came out of money that had been earmarked in advance it. There were a few necessities that I've been needing to buy and have been unable to out of lack of funds. Rather, it hasn't been a lack of funds, but that I didn't want to spend any money until I knew I was completely in the green. Thus, I'm not counting that money as being taken out of this month's income/expenses.

I go to deposit my financial aid check tomorrow. Woot. I'm debating exactly how to portion it. I want to do half in savings for an emergency sort of fund and half to pay off my highest interest credit card. I'm playing with roughly 800 dollars. Opinions?

10-14- Sunday
Tips: +126.00

Total: +126.00


gildedbutterfly said...

How much is on your highest-interest card, and at what rate? To me, that would make a difference. I would still put aside a couple of hundred into savings, but if I had $1000 at 23% interest, for example, I'd probably put $600-700 towards the debt, and keep only $100-200 for emergencies.

It's definitely important to have an EF, so that if something happens, you don't have to add onto the debt. But it's equally important to stop paying other people interest ASAP.

It's a balancing act! :)

Thrifty Penny said...

That's awesome you're contemplating putting money into a savings account! I finally opened a savings account my junior year. I'd recommend putting 75-80% towards the credit card with the remainder in savings. Keep in mind that FAFSA formula expects you to contribute 20% of your assets towards school if you don't qualify for the simplified needs test. I'd recommended to keep the savings low in order to maximize on financial aid.

SavingDiva said...

I agree with gildedbutterfly. Have an EF, but also pay off your credit card debt (no need to pay interest)

VixenOnABudget said...

Thanks for all the advice! My next post will relate to all this information...