I never read the book by Ellen Degeneres but I have always remembered the title because I tend to take the scenic tour to points that I want to make. So, here we are coming back around on emergency funds, why I build mine up slowly, don't worry about the 3 to 6 month advice, and probably won't touch mine.
Let's say for example that you've been working this plan for a year and all of the sudden, out of the blue, how shocking is this, you need four new tires for your car. How will you deal with this "surprise" expenditure? Credit card? Hell no! Dip into the emergency funds that you've been building up? You could but why not just pay cash?
Cash?
Pay cash?
You can do that in 2007? There are people out there that accept cash?
As a matter of fact, there are.
You'll be encouraged to charge of course. "Do you have one of our Nifty New Tire credit cards? You'll be saving 10% on today's purchase." You'll have to pay 22% interest over 3 years for that 10% "savings" but what a deal, eh?
You will be surprised at the amount of cash that you free up as you pay off debts. On this plan, you take all that money and put it toward another debt. If you follow this plan, you'll be out of debt in about 5 years. I mean, completely out of debt including having a house paid off.
The fewer debts that you have, the easier it is to deal with the "surprise" expenses with cash. When you haven't promised your money away, you can use it where you want or where you need.
I'm not saying that it's super easy. The financial system that we have is a trap built by banks and once you're in the trap, it can be hard to get out. I *am* saying that it's worth it. You'll have more money and so much less stress. Too great things in your favor when hit by an "unexpected" expense.




Recent Comments