Comments on No Debt MBA: Do I need an emergency fund?

I have an emergency fund which is in a savings acc...

2012-02-08T02:05:26.555-08:00

I have an emergency fund which is in a savings account so I can access it right away, and I also have another larger account with one of Vanguard’s bond index funds. The bond fund value fluctuates a little, and if I do have to pull money out for an emergency, I am ahead of the game because 6% it much better than 1%.

I was reading a book written by a guy who went to ...

2011-08-21T13:44:42.372-07:00

I was reading a book written by a guy who went to HBS for his MBA who came from a poor blue-collar working class family (i.e. they had no money to subsidize him). That said, he was in a similar boat as you are. One of the things he did was he and a couple of his classmates started a low-cost consulting firm and hired themselves out on the cheap (compared to say Deloitte) to small businesses who couldn't afford big fees. This gave him a chance to network, get experience in multiple industries, reinforce his learning by applying it immediately and earn a few bucks to pay for school. Much better than working at Starbucks...

Selling Theta - I'm still considering t...

2011-08-04T05:04:47.224-07:00

Selling Theta - I'm still considering this option, but since congress just slashed all subsidized loans for grad students it's looking less appealing. Still better than a credit card though.

I would definitely go with option two. If you hav...

2011-08-03T07:51:10.107-07:00

I would definitely go with option two. If you have the discipline to budget all of this out, take the loans and keep them segregated. After you become gainfully employed, pay off the loans.

Buck Inspire - I like this approach and my ...

2011-07-29T05:39:02.476-07:00

Buck Inspire - I like this approach and my SO and I have talked a little about setting something like that up if need be. It's nice to keep the money in the family.

Could you structure a low interest loan with your ...

2011-07-28T21:48:47.755-07:00

Could you structure a low interest loan with your parents? When you are making the big bucks, you'll repay with a nice interest rate which they would not get in a bank. Everyone wins!

Thanks for the advice everyone, and feel free to k...

2011-07-27T04:59:23.948-07:00

Thanks for the advice everyone, and feel free to keep it coming. I've declined all loans for this year since I'll have cash on hand, but next year I may accept the subsidized Stafford portion ($8,500) and not have them disbursed unless it's an emergency.

Everyday Tips - Tuition on a credit card sounds brutal! How much interest did it accrue before you could pay it off?

Mom's Plans - Any monetization advice is welcome. I just slapped Ad sense up as a place holder ;) So far it's paid for my domain!

cashflowmantra - I agree that student loans would be better than credit cards. Don't think I could get a 0% balance transfer with less than a 1% fee and interest rate of less than 6.9% after one year which is what it would take to be better than the subsidized Stafford loan.

I would go with accepting the student loans but no...

2011-07-26T20:18:38.378-07:00

I would go with accepting the student loans but not cashing them out unless you need to. Also, you could try to monetize your blog to make a little side money.

I go with a combination of 1 and 2. You apply for...

2011-07-26T20:08:54.100-07:00

I go with a combination of 1 and 2. You apply for the loans, wing it, and if you need the money, you dip into the loan money.

I had to charge tuition on a credit card when I was in graduate school because I couldn't get anymore loans, and I didn't have enough to pay tuition, even though I worked during school and every break. You are doing great as it is, and there is nothing wrong with providing a little breathing room for yourself.

Frugal Student - I qualified for Subsidized...

2011-07-26T11:07:28.893-07:00

Frugal Student - I qualified for Subsidized Stafford loans but they're capped at $8,500 per year and have a 1% origination fee. I'd make a little over $100 over two years by putting the money in a savings account. Even a two year CD can't boost earnings to more than $200 since interest rates are so low. With that little reward it just didn't seem like it would be worth the effort and paperwork. Plus there's always the chance I'd spend it all ;)

Are your student loans subsidized? If so take the...

2011-07-26T10:51:36.697-07:00

Are your student loans subsidized? If so take them! Take the first semesters loan, stick in a high yield savings or checking and let it earn interest for you. Then a few months after you graduate, pay the sucker off and pay no interest.

I would consider option number 2. I would assume ...

2011-07-26T10:14:32.985-07:00

I would consider option number 2. I would assume that these are school loans which might represent a decent interest rate (much better than a credit card if you were in a bind). If you make it through without needing them, great. If you even take the money to pay tuition and use your funds to pay it off at the end of the year, you might still get by with no debt or a few thousand at most.

My favorite approach is on the list, winging it. ...

2011-07-26T06:57:53.567-07:00

My favorite approach is on the list, winging it.

Wing it, man. Things will work out fine, and it'd be better to spend the energy on what matters (getting the most out of your studies) than planning for failure.

Do you have open credit lines? Maybe you could hit up a CC for a large balance transfer check at near-zero rates. Worst that happens is that you borrow a lot of money inexpensively at a rate that won't make you broke. If that's your worst case scenario, then you're doing just fine.

I agree with Money Beagle. I think it depends on y...

2011-07-26T06:39:05.967-07:00

I agree with Money Beagle. I think it depends on your other assets and account. We also have an emergency fund but this is only because we haven't established our other savings to the point where we feel like we can get rid of it. It is nice to have the extra security though.

I think every person needs to evaluate this differ...

2011-07-26T06:35:22.643-07:00

I think every person needs to evaluate this differently. I have a dedicated emergency fund, but sometimes I wonder if this is overkill, because I also have separate funds for things like a new car, home renovations and such. All of those 'funds' could be tapped in the event of an emergency and most likely I wouldn't be buying a new car in the event of an emergency, anyways, so I wonder if I'm keeping too much cash on hands. In the end, though, I am more comfortable that way as I'm pretty fiscally conservative. It just depends on your level of comfort, I guess!