Measuring the Past Value of a Dollar

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In my Wills and Estates class the other day I learned of a website called Measuring Worth.com. This site lets you measure the historical worth of a dollar. A dollar from my birth year is worth from $5.01 to $16.63 today depending on what measure you use. Using the Consumer Price Index which is the most common measure you get a value of $6.21. That helps you realize the effect of inflation.

They also have several other calculators including one that lets you measure what a historical investment in the Dow Jones, S&P 500, or Nasdaq would have returned. Those returns don’t include reinvested dividends though which makes the returns lower than they should be. Also, for those from the United Kingdom they have calculators for the pound using the UK GDP, CPI, and other data.

Why I Paid Student Loan with My Credit Card

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It appears that I need to give more information on why I paid down my student loan using a balance transfer from my credit card.  I’m confident that it was the wise choice.  My student loan charges 8.5% interest and the credit card charges 3.99% interest.  The credit card is cheaper money.  Even with the $75 balance transfer fee I’ll come out ahead using the credit card.

There is a limit of $2500 in student loan interest that can be deducted in a year.  This transfer was for $4900 and a little over $1600 of that went to interest.  I plan to pay this loan down more over the year and it is possible that I’ll hit the limit.  Even if I don’t since my taxable income for the year will likely be low I don’t think I would be able to use all of the $2500 deduction.   I don’t think this deduction would allow me to get back more than the taxes I pay.

There aren’t really any programs I know of that will pay off law school loans. There are some LRAP programs but the ones I have seen would fall well short of paying all my loans.  I have about $50,000 in loans now and will probably have about $65,000 when I graduate.  I’m not worried about not having any loans available to be forgiven.  I’m trying to pay down my Grad Plus loan since it has an 8.5% interest rate but I plan to stretch my Stafford loan payments out as long as possible.

Daylight Saving Time Info

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This is off topic but some of the misinformation I hear about Daylight Saving Time (DST) irritates me so I’m going to try to correct some of the more common misinformation.

I’ve seen it stated that DST was started to help farmers. If you know any farmers then you know that is illogical since they generally get up with the sun regardless of what the time is. DST was started in the U.S. as a way to save energy. Whether it actually does that and whether it is the reason we have DST now is open for debate. You can find studies supporting both sides.

The hours of sunlight in a day change because of the tilt of the earth’s axis. Some people think that DST actually changes the hours of sunlight in a day. It only changes what time of day we have sunlight. In order to actually increase the hours of sunlight in a day would require powers much beyond what Congress has.

I personally like having the extra hours of sunlight later in the day since I’m not an early riser. I’m not really sure if DST is an overall benefit though.

Used CC Balance Transfer to Pay Down Student Loan

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I went ahead and used the balance transfer from my credit card to pay down my Grad Plus student loan.  The amount of the transfer was $4900 plus a $75 balance transfer fee.  Since my interest rate will be over four points lower on the credit card I should easily make up the balance transfer fee.  If my math is correct after seven months I’ll come out ahead. The credit card rate is for life and I have other higher interest debt so I’ll be paying only the minimum or slightly above the minimum payment on the card balance. Once I graduate and my income is more certain I’m going to look into paying down more of my student debt in this manner.

One of my goals this year was not to incur any debt other than student loan debt.  Since this is just student loan debt transferred to my credit card I feel it is within my goal.