Debt Finances & Money Frugality

Graduation Present or Pay Off Debt?

In just 2 months from now, I should be graduating with my masters degree from The Johns Hopkins University (an engineering degree, not medical). I was accepted in May 2007, and started my first class in September 2007. Now, over 2 years later, I have just 2 classes standing in my way. It’s been a stressful 2 years, and lately my personal and professional life (including this site) have taken a hit due to the stress.

While the program cost roughly $28,000, with a combination of tuition reimbursements (last employer) and a sign-on bonus (current employer), my out of pocket cost for this program was $8,000 or so (I don’t have Quicken with me to check the exact amount). Not bad for a full masters degree from a prestigious, private university.

What is my graduation present?

Good question! For the last 2 years, I’ve been lusting over flat screen TVs, but my wife has told me I need to wait till I graduate to get one as a present. Although I could have just went out and bought it with cash (thanks to getting rid of so much of our other debt), I honored her wishes this whole time. Now that the end is sooooo close, I’ve been picturing that TV in our living room, especially with football season and the fresh fall TV schedule in full swing.

But I’m not settling for any regular flat screen TV. No no no, I want an LED LCD TV. These are the latest TVs that are lighted by light emitting diodes (LED) rather than fluorescent tubes (or plasma, which isn’t really a backlight). The LED LCD TVs are thinner, more energy efficient and give more of a “true black” than regular LCDs, without the ghosting effect that plasma TVs get.

While I’ve been saving up for the TV, and prices for LED LCD TVs have dropped drastically in just the last few months, at $2400 and up for the 50″ range, they’re just too expensive to justify, especially compared to their fluorescent counterparts. So what do I do?

Are we out of debt yet?

Another goal that I had was to pay off my undergraduate student loan before I graduated with my masters. Right now, that amount stands at around $6,000. I had the money ready for it, but unfortunately we had to spend $7,000 for pool repair this fall (the bill is yet to arrive).

Which goal is more important to me? Spending $2000+ on a new TV or paying off my $6000 student loan?

I’ll have to admit that I REALLLLLY want that new TV, but right now, the debt is nagging me. While I’ve been back in school, the loan was placed into deferred status, and the federal government has been paying the interest on the loan on my behalf. I’ve still been paying $200 a month over the last 2 years, sometimes more, but haven’t felt pushed to get rid of the debt since I wasn’t paying interest. But now it’s crunch time for 2 goals, and I can only work towards one.

TV or Debt Reduction?

I actually already had this conversation with my wife this past week, and I think I surprised her by saying I’m going to pay down debt and postpone the TV purchase. One reason is that I want to get out of non-mortgage debt ASAP, but the other is that I think the prices on these new TVs will come down even more. I’m willing to spend up to $1500 for a high quality 240hz LED LCD TV in the 50″ range, but not $2500-3000.

For now, I’m going to work hard to pay off that student loan debt. I don’t think I’ll get it paid off in the next 2 months, but at least I can cut it down by another third or more.

And perhaps I’ll make a good example for you, my readers 🙂

About the author

Clever Dude


  • Dude –
    Paying the debt off is the right thing for you to do. Once you have no debt, and are saving for retirement, you’ll be happy to have the cash to save up for these kind of expenses.
    The good news on the TV – the longer you wait, the more it drops in price and increases in features. You’ll have the TV and more money in your pocket. I hear the misses is eying a couple pairs of shoes…..

  • Dude, I feel your pain. I have a serious case of laptop fever right now. I just paid of my student loan debt and although I wouldnt go back into debt, I feel guilty? dropping 600 or 1500 on a laptop.

    This wont help you but I spent 500 on a nice 32 inch hd a couple years back and it has been a tremendous purchase. I xbox the crap out of it and watch some football and its flat out lovely.
    So, now that im conscious of my finaces it makes me want to pull the trigger less and make sure I get value. too many choices out there though, I just gotta man up.

    Plus its been 3 months so its not an impulse buy right? I got the cash? You only live once, have some fun.

  • Buy the TV. Buy the TV. Buy the TV.

    I looked at the LED type myself when considering an upgrade to a bigger TV and didn’t see enough savings or benefit over an LCD type. I think you needed to watch something like 80 hours of TV a week for five years before the energy savings made it worth it. And LCD over CRT would have been such an upgrade that LCD to LED wouldn’t have been that much of a gain. (Ultimately we bought nothing when we remembered we watch one hour of American TV a week, if that.)

    How about a compromise: a 42″ LCD TV for $600 until the LED types drop down closer to $1000? Do it! Do eeeeeeet!!!

  • Get rid of the debt!! You’re right, once your debt is paid off, that new TV will be so much nicer.

    I agree with Nick that you could also do a compromise and buy a smaller TV. Wait until Christmas time and you can get it a lot cheaper.

  • Dude – Your graduation present is your degree – no more classes and exams. What could be better than that? Pay down your debt. There are some new display technologies breaking out. You should wait for them anyway.

  • You are a good example. I don’t know if I would have been as disciplined (who am I kidding, I wouldn’t).

    Congratulations on your masters. As Mr. ToughMoneyLove indicated that is the real present!

  • After I graduated I had two things on my “need to have” list. A PS3 accompanied by a no smaller than 40 inch LCD HD TV. My first job didn’t pay extremely well, but I was still making more money than I ever have before. And of course I had the dreaded school loans… I did a lot of research online and came across a site that had too good to be true promotions. After really looking into it I realized I could get the TV for ultimately half price. I knew what I had on my plate so I got creative with it and got everything I wanted cheaper than I ever imagined…so go after the present…why wait for happiness?

  • Wow, I actually thought you were going to run w/ the TV! We all know the obvious thing you *should* do w/ that money financially speaking, but I wouldn’t hold it against you at all if you changed and picked up the TV. It’s perfectly fine to reward yourself every now and then, esp. since it’s not like you go out on splurging binges anyways. If you wanted a new toy every 3 months then I’d say you’re crazy. But when was the last time you treated yourself to something in this range?

    Either way, it’s cool to see you’ve put in so much thought 🙂 Congrats on almost being done!

  • I say that you should get the TV. Financial responsibility is about moderation. It sounds like you’re a person who is restrained (although I don’t know your total background). My motto is be careful, not cheap. Something that you interact with every, single day is an important part of your life.

    I also agree that you may want to consider a compromise for a smaller tv.

  • @All, thanks for your insights! While I’m still dead-set on paying off the student loan debt, I think I will end up pulling back from the LED LCD TV and opting for a good quality regular LCD or plasma TV of similar size. As far as a smaller size, we have quite a long (narrow) room, so a 50″ wouldn’t seem very big in there. Now a 60″…

  • Pay off the debt! It is neat to see you making responsible decisions. It will be sweeter if you wait, and you are right, you can get more for your money in a few months. Do you have lots of time to watch football?

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