Dave Says: Paying for the Classes

Dear Dave,

My wife and I have our fully funded emergency fund in place, and we're debt-free, except for the house. She wants to return to school to get a master's degree and change careers. She'll be reimbursed up to $7,000 a year. Can we use some of our emergency fund to get things started?

Kevin

Dear Kevin,

I've got a better idea. Save up the money!

You guys are in great shape already. And to me, this opportunity seems like a small investment with a fabulous return. I really like the idea. But you have to be careful when it comes to things like this. You don't want to get into the habit of calling things emergencies when they're not emergencies. It's a great thing, but it's nowhere near an emergency.

I know she's excited about the possibilities, but I'd just roll up my sleeves, save a little extra for a while and cash flow the classes. She'll probably get reimbursed for the first classes right after she gets her grades, then you can use the reimbursement check to pay for the next classes, and the next check the next classes. Make sense?

I love the school idea, and I'm glad your wife has such a great opportunity. But I don't want you to take a chance on messing up the progress you've made in taking control of your finances. Just take your time and save for those first classes. You'll be glad you did!

—Dave