What Would You Do?

[dapdrow]

Suppose you are going to start medical school in a year or two. Because you have been a working adult for many years and you are decent with your money, especially considering you live in one of the most expensive cities in the country, you have saved more than 100K. Your spouse is totally on board with you going to medical school but you really try to avoid debt at all costs. However, you worked really, really hard to save this money and would hope you'd have something left by the time you finish medical school.

Would you:
1. Take out loans anyway; keep the money for something else in the future, like a house
2. Use up everything you've ever saved, as long as your spouse is okay with that
3. Take out loans for part of your time in medical school and use some of the savings

I know it depends on where you go to school, in terms of tuition, and where you end up living. But let's imagine your tuition is somewhere between 38-50K and your spouse will probably be supporting your behind while you're in school in terms of paying for housing and food.

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[Bones 2020]

I'd at least use some of the money. Take out loans and pay them back on time to raise your credit score, but use some of the cash for housing, books, etc. Maybe put some of it into a low-risk investment/CD to try to get some money back for after you finish school. But remember it's important to have an emergency fund at all times.

However I recommend just talking to a financial advisor. They seriously know all the tricks to get more out of your money

 

[Goro]

This is what I'd advise my kids to do. You have to think long term and about the interest you'll be paying.

Whatever interest that you'd make on a CD will nowadays be nowhere near what the interest on loans is.

I'd at least use some of the money. Take out loans and pay them back on time to raise your credit score, but use some of the cash for housing, books, etc. Maybe put some of it into a low-risk investment/CD to try to get some money back for after you finish school. But remember it's important to have an emergency fund at all times.

However I recommend just talking to a financial advisor. They seriously know all the tricks to get more out of your money

 

[dapdrow]

Have you been maxing out your Roth IRA/IRA/401k (the employer match if you have one)?
Do you really have 100k CASH just laying around? Liquid? If so, I would contend that you aren't really that decent with your money. Excellent at SAVING but that's another animal.

Ditto'ing the financial adviser advice. Might be time to look into a house? Good time to put down a sizable down payment.

I have a Roth IRA on my own accord that I do max out every year. I'm in a union and would receive a pension from that on top of the IRA. My husband has a 401K that has a pretty good employer match.

I already own an apartment. I put down 25% when I bought it. The point of saving was to buy something else down the line that was larger and required a bigger D/P. Didn't want to tie it up in anything because we thought it could be within five years or so. Bought my current place at a steep discount and was going to sell it for a profit. (Plus my maintenance and mortgage costs are less than renting.) Just to give you an idea---my grandmother's house (which isn't even updated) just had an offer of over one million on it---so D/Ps are steep around these parts.

No point in looking for a house at this point. I am willing to move if I am accepted into a school.

 

[meddie1991]

I recommend posting this question to


reddit.com/r/personalfinance

 

[kinzav]

I'm gonna echo what Goro said. Unless you think you can beat the interest on your loans somehow, use the money there. Taking out the loans will cost you, say, 100k +6.5% interest (I think that's what mine is?) over 4 years (assuming you'd make payments as a resident), you save something like 30k.