Author Topic: Returning to School, Seeking Input  (Read 395 times)

RePatriot

  • 5 O'Clock Shadow
  • *
  • Posts: 65
Returning to School, Seeking Input
« on: January 03, 2019, 03:26:17 PM »
Life Situation: MFJ, no kids

Gross Salary/Wages: $90k between both of us

Pre-tax deductions: HSA $6900, 403b $19000, 2 IRA's @ $12000 total

Other Ordinary Income: another $7k in side hustle income

Adjusted Gross Income: Roughly $53-$60k

Taxes: About $3-4k

Current expenses: $45k a year, with easy cuts of $5k and potentially $10k

Assets:
Cash: $54,623
Retirement Accounts(2 IRA's, 1 HSA, 1 403b): $46,274
Vanguard Taxable: $14,256
American Funds Taxable: $23,308

Specific Questions:
After taking the LSATs in March, and again in June, I am aiming to attend UT Austin.  Being my first choice, I'd apply for early admission, which shaves $10k a year off of tuition, bringing the yearly total down to $25k.  We'd also have to relocate and pay for the costs associated with that.  If I am not accepted to UT Austin (about a 50% shot, but I have some desirable unquantifiables), I'll need to reevaluate based on scholarship offers vs. prestige of school and job placement for secondary choices.

DW currently works as a nanny, and that job will be ending in August of 2019.  However, I believe her current family will recommend her to other families in the area seeking a nanny for 2019-2020.  However, this network does not likely extend to Austin.  A brief glance at job postings does show plenty of openings for a nanny, though, so that is heartening.

Student loan rates are approximately 6-8%, accruing interest for the 3 years I am in school.
-Would it make more sense to save cash during 2019-Fall 2020, and try to pay tuition cash, or invest pretax?
-What about taxable investments?
-How much cash should I have on hand Fall 2020?  I'm trying to balance the risk of carrying too much cash with DW's potentially rocky employment situation.

Also, I am not happy with the American Funds fees and management.  These were inherited, and I want to sell them and dump the balance in with the Vanguard taxable account. The funds have been in my wife's name for a few years, so no risk of running afoul of short term capital gains taxes.
-Since our AGI is between $50-60k, assuming we continue to max out all of our pretax space, would it make more sense to wait until I'm in school and income is significantly lower to sell off and move these over?  I'm not sure what these years with DW as the breadwinner will look like financially, so I'm not sure if this will affect healthcare or other potential subsidies or scholarships.

I take care of the finances and my head is swimming with the different possibilities, so I figured I'd gather some different opinions.  Thank you all for your input.
« Last Edit: January 03, 2019, 03:40:14 PM by RePatriot »

ysette9

  • Magnum Stache
  • ******
  • Posts: 3591
  • Location: Bay Area, CA
    • Insert Snappy Title Here (Journal)
Re: Returning to School, Seeking Input
« Reply #1 on: January 03, 2019, 03:49:25 PM »
I can’t address all of your questions, but if you have a near-term need for cash then you should be saving in a money market or high/-interest savings account, definitely not investing that money. The market couid ne very unpredictable between now and then and you don’t want to risk money you need soon.

RePatriot

  • 5 O'Clock Shadow
  • *
  • Posts: 65
Re: Returning to School, Seeking Input
« Reply #2 on: January 03, 2019, 03:56:33 PM »
I canít address all of your questions, but if you have a near-term need for cash then you should be saving in a money market or high/-interest savings account, definitely not investing that money. The market couid ne very unpredictable between now and then and you donít want to risk money you need soon.

Thanks for the response.  To clarify, I'm trying to lock down how much I will need in cash for the future.  I won't be putting any money I definitely need in the future into the market.  However, "definitely need" is difficult to define given the moving pieces outlined above.

Mrs.MLM

  • 5 O'Clock Shadow
  • *
  • Posts: 67
    • Moving Little Mountains
Re: Returning to School, Seeking Input
« Reply #3 on: January 03, 2019, 04:20:29 PM »
Do you want to live and practice in Austin, Texas? If not, I suggest going to law school where you want to live and practice.

Also, I can't help but say this: don't go to law school. If you do go to law school, take out as few loans as possible so you have the option of not being a lawyer.
« Last Edit: January 03, 2019, 04:25:25 PM by Mrs.MLM »