[disneysteve]

Originally Posted by swanson719

Steve and I have different views on most things on here, but I think both have merit for different reasons. Paying down the CC's fastest saves you the most amount of money because you avoid interest payments. Taking 5 months to put $1,000 in savings can be beneficial to that end, unless you get caught needing that $1,000 during those 5 months and then end up putting the difference on your CC's.

I'm in the Dave Ramsey school of thought. If you give murphy a place to live, he'll move in. Put the $1,000 aside as fast as you can, which is about 45 days, then pay off the credit cards and cut them up, never to be used again. Play with snakes, you're going to get bit. Some people use CC's as a tool for the rewards, etc. but that doesn't work when you run out of money and have to carry a payment.

I can't argue against this advice. It is certainly a valid way to attack the same problem from a different angle.

I am a fan of credit cards but only for those folks who can use them responsibly. If you are the type who can't use one without overspending, then you shouldn't have one at all. If you can't pay your bill in full each and every month on time, then you shouldn't use one at all.

And everyone should have at least a small savings cushion for those unexpected expenses. However, as I've said many times, most things that people call "emergencies" really aren't. They are just things that you forgot to include in your budget. A car repair, for example, should not come as a surprise. Cars break. House items need repairs. People get sick. We may not know when those things will happen but we can be certain that they will happen and we need to be prepared for them. There should be a car maintenance line on your budget. If you set aside $100/month for car maintenance, when that $500 repair bill pops up, you'll be ready. If you have a home repair account and put in a couple hundred each month, you'll be all set when the washing machine starts leaking. If you designate money every month for medical expenses, you won't have to resort to a credit card when that emergency room visit happens.