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3 posts • Page 1 of 1
- Posts: 18282
- Joined: Wed Oct 14, 2009 10:47 pm
shadow. wrote:I am entering GULC in the fall after 1 year of WE. I am financing it completely through loans. $20,500 in Stafford and the rest in PLUS. My law firm just gave me a 5-figure bonus, which is about equal to my total credit card debt.
Should I pay off the credit cards, or put it in a CD or what? I don't need it for living expenses or anything really. I just have no clue what to do with the money.
Thanks for any suggestions.
Pay the credit card debt.
- Posts: 490
- Joined: Tue Jun 09, 2009 2:29 am
Desert Fox wrote:Pay the credit card debt.
TITCR. The first step in personal finance is always to pay down to zero short-term debt.
And don't buy into the Dave Ramsey school of paying off the smallest balance first, for the "psychological win." Look at all your credit cards/loans/whatever, rank them by interest rate, and put every disposable dollar towards paying down the account with the highest interest rate first. If your bonus is really going to enable you to pay off all your credit card debt, do it. Then contribute the max to your 401k before leaving your job. Then open a Roth IRA and invest in a Vanguard lifecycle fund. Then establish a regular investment schedule and profit.