Learning experience

I recently learned something new about my love interest. He is deep in debt with his credit card company harrassing him because he put all his college tuition, books, fees, etc. on his credit card. He graduated in 2006. He thought if he cashed in his 401K plan at work, he could pay off his debt. He asked my opinion on that.

When he first mention he had student loans to pay off still, I naturally thought he meant the government student loan kind that one can deduct off your taxes. One gets 10 years to pay those off and low interest that no credit card could compete with. Apparently his parents did not teach him about financial aid packages.

I was polite enough not to ask what the hell was he thinking putting on his college bills on a credit card and why didn't his parents help him out. I simply stated that 401k plans are not savings accounts, they are retirement funds. I further explained if he cashed his in to pay off his credit card that he will be paying income tax on that amount he takes out. I didn't mention all the early take out fees he would pay too, I was being polite. I told him my former manager emptied her husband's 401k to pay off their credit card debt and their H&R Block person freaked when she saw what they owed in taxes. Need I say more what a unwise idea that is if one is not prepared to pay a heavy tax bill next year. Posty later. Bye!