Build a Cash Reserve and Kiss Those Credit Cards Good-Bye
Yesterday, I blogged about the college kid wearing a T-shirt that said, “I know the credit card is for emergencies, but she was HOT!” and mused about how college and military guys are impulsive when it comes to dating and really shouldn’t have credit cards. It didn’t take Patrick from Cash Money Life to disagree with my statement that I don’t think ANYONE should have credit cards, to which he commented:
I would be careful here. Credit cards can be a good way to establish credit history and not everyone has an extra $1000 to buy an emergency airplane ticket or some other high dollar expense. I think *cautious* use of credit cards is legitimate and almost necessary for people who don’t have cash saved.
OK, Patrick, I said I’d write a whole post on this LOL and here we go! You say not everyone has an “extra” $1000 for emergencies, and that is most likely true. However I will counter that anyone and everyone COULD have $1000 in the bank as an emergency cash reserve and all they have to do is … well, just save it!
Like the old Nike ad, “Just do it.” I did it, so I firmly believe anyone is capable of accomplishing it. All it takes is wanting to do it, and learning how to budget. Seriously … *I* did it! Hubby is only an E-4 in the Army and I deliver pizzas, and we still found the extra money every month. Thousands of Dave Ramsey fans have done it, since Dave made that “baby step one.” Folks, it CAN be done, even on lower than average incomes! Hubby and I are living proof.
Once you get that “magic” $1000 in an account, then you can kiss those credit cards -and ALL THE FEES!- good-bye, forever and ever, happily ever after. No more worrying about how close you are to the credit limit. No more worrying about when the due date is this month (because they intentionally move the due date around trying to hit you with late fees). No more interest fees, which some now call “finance charge.” Best of all, no more worrying about how you’ll even get together a minimum payment if Murphy decides to move in, take up residence on your couch, and make your life an example of his law: if anything can go wrong it will.
I do like Lynnae’s idea of freezing credit cards in ice if you aren’t quite ready to take the plunge and cut them up. Combining that with No Credit Needed’s challenge last week, I am throwing down the gauntlet (publicly) to you, Patrick: Go three months without using your credit cards! Put the $1000 emergency fund in place, freeze your credit cards (better yet cut them up LOL), and go the entire first quarter of fiscal year 2008 without the plastic.
