Well, I need to pay off my credit cards, since I owe a lot and I want to buy a TV. It seems I can get an 32″ TV for less than 600 USD, but I don’t want to spend that much cash and I don’t have that much in credit. I also need to pay off my credit card to pay off the rest of my computer that I bought in January and February.
The solution involves:
- Not using the card
- Paying about 50 USD to 150 USD a month.
- Paying more per month than I spend
If I can do that, then I’ll be well on my way to buying that TV in about 5 or 6 months. I’m thinking about paying out 200 USD for a couple of months. I do kind of also hope that they don’t up my credit limit, because I’ll be more likely to buy it sooner. That wouldn’t be a terrible thing, since I’ll probably also have enough credit to buy a laptop eventually.
The time length is about right. I don’t need a HDTV at this point of time and was willing to wait until next year or another two years before I spend the money. Well, it would be nice to go LCD, both for my monitor and for my TV. For the price, I can’t really pass it up. Waiting a year or two was back when I would of had to spend $700-$1000 for the TV, buying a 32″ for less than $600 is a deal too good to pass up.
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Wouldn’t saving for it be much better? Especially for something like a TV.
Additionally, credit cards have ridiculous interest rates, what about a personal loan?
Yeah, but if I’m saving 600 dollars, it isn’t going to be for a TV. I do need to start saving again, but mentally I can’t spend that large of an amount from my bank account. I know if I don’t have money in my bank account and the shit hits the fan, then I’ll be screwed. It is easier to spend money that I don’t have than money I do have.
You are right about the Interest Rates, but I can’t get a loan and even if I could it would have the same about of interest rate of my credit card.
Personal rates can be much lower – the problem with credit cards is that are really an expensive short term loan facility. You need to get rid of those balances quickly before they get too large. I agree on the monthly payment – just set the minimum you think would be paid per month as a direct debit payment (if you have to formally cancel payment than you’re less likely to
). And do pay off as much as possible over that amount – even if you’ll be spending it again it will lower the overall interest you’re being charged per month. Just keep enough cash to handle those expenses you don’t usually use a credit card for.
In fact, it’s far cheaper not to save – money saved might earn a small interest. On a credit charge, the saved interest from paying it off would be much higher.
Speaking from experience (bear in mind I’m part accountant as well as part IT consultant
), maintain a personal budget. Get a Excel/Open Office spreadsheet and list all your expenses, your incomes, and your proposed credit payments. Get everything organised and keep to the budget you decide on and things will work out a lot better. If nothing else tracking it for even a month will tell you whether you’re spending in areas you didn’t think were expensive.
I remember doing my own personal budget and finding the daily newspaper was costing me €528 per year (that’s a lot more than €600
). Often the simple things you buy every week/day are costing you a lot of cash you don’t think about. I later subscribed and had it delivered to my office (which was far cheaper).
I’ve thought about doing that and I’ve done that in the past. I think I spend more money on food, than anything else. I figured if I stopped eating as much I’ll have a lot more money to spend on stuff that is important.
That is a good idea and I think I’ll give that a try formally. Really hard, but not really, I just need to look at my bank statement and credit statements (which is how I did it last time). I barely ever use cash.