No thanks. My way works for me. As I said before, I don't feel minimal CC debt is bad. In my example, a few dollars of interest doesn't hurt. I pay less in interest, by far, than most spend on drinks and/or tobacco.
I guess it depends on your income and how expensive a freezer you have. To me an emergency fund is for major expenses like the HVAC needing to be replaced, or a car. I don't think the freezers most people buy would rise to the same level.
As stated before, to me, an emergency fund is more major events.....job loss, loss of house due to fire, sudden HVAC replacement. I'd put a freezer on a CC and pay it off in 3 months while eating maybe $30.
I guess we disagree on what an emergency fund is for. I can afford the $30 in interest....really that is just one meal at a restaurant spread out over 3 months. No biggie.
How do you get interest charges on just the freezer portion of your cc bill? Or do you have multiple credit cards, one just for things you're not going to pay off?
I don't usually use credit cards so my balance is generally zero on my 2 cards. But for example, I bought a freezer on a card and paid it off over 3 months. That was the only charge on it.
It’s a gamble, my mom had a government pension and health insurance, she was always in such better health that my dad. When she was diagnosed with an aggressive cancer, he had Alzheimer’s, COPD, and was overweight, she was a health nut, exercised daily and ate healthy. Unfortunately they gambled on her outliving him. Had to pay an additional $500 a month for health insurance. He died 4 years later, and fortunately they had saved enough so he kept the house, and paid for a live in. They had a financial advisor and an attorney (plus my H, a CFP) to map everything out.
Let me get this straight, I should divert money that goes into my 401K to pay for the freezer? I'd have to contact my plan administrator, fill out forms, and wait a couple pay periods for the change to take effect. Then do it all over again to reset it back in 3 months. My EMERGENCY fund at my bank is only for emergencies and I never touch it unless in an emergency. My way is simple and it only cost maybe $30 in interest. Thirty bucks is nothing, a pizza and bread sticks on a weekend.
I doubt anyone would advise stopping 401K contributions to buy a freezer. Alot of financially sound people would simply use their extra money to buy the freezer. Then pay themselves back and save the interest. This is what we would do. But we keep a lot of cash around for emergencies and extra things that we need so we never finance anything.
Or buy a less expensive freezer instead. They start at $200.
I am not sure why people are so hung up about $30 in finance charges over 3 months. My EMERGENCY fund is for emergencies only. I'm pretty disciplined about that.
Some people just have the mindset of "all debt bad!", without considering that some people make different choices. My personal favorite is, "always pay off your mortgage as fast as possible!" There's absolutely nothing wrong with having that goal...but, some of us have a really low interest rate, and can make more in the stock market, rather than selling off stuff to pay off the mortgage. That doesn't make others wrong on mortgages (or not wanting to pay any interest, ever), it just means that I've considered the options and do what's right FOR ME. Just like you do what's right FOR YOU.
What kind of interest rate do you have where you only pay $30 over three months?
What kind of freezer are you buying for more than $30 in finance charges?
It was an estimate, it was such a small dollar amount I really don't know what it was.
I agree with most of that except for the part about putting a vacation on a credit card unless you mean the money has been saved and the vaca (card) is immediately paid off.
I don't remember what we paid for our Sub Zero freezer in 1999 when we built the house, but I just looked up the model we had and they're $12,000 now. That'd decimate my IRA!
