I did have this problem. I make a good amount for my age, and so I thought I always had the money for anything. Eventually, my credit card bill just got too high, and I started living paycheque to paycheque. I owe over $25,000 now (mix of car and credit card). I got it into control, and by April next year it will all be paid off.

Sometimes it isnt horrible to go get that big ticket item, it can really wisen you up about spending big bucks for stuff.

 

um, no.

 

This seems like a good idea. But to me, I would never be comfortable not having some emergency cash I can access quickly. What do you do if you have something take a shit on your car or house that is $1k+ and needs fixing immediately?

I find that having good hobbies keeps me from wanting to spend. I'm so occupied with them that I have no need to scratch that itch. Sure the hobbies cost money upfront, but have relatively small costs usually to sustain. (dslr camera, driving s2k, having a beer with friends)

 

That would be deemed an emergency, and I'd use the CC for it. Then I'd still have plenty of time to move the money from savings to checking before I had to pay the CC bill.

I never have more than $1K in my checking account, unless it's already pre-allocated to pay a specific bill (mortgage, property tax, etc). My checking account is not an interest-bearing account, so I don't want to keep any more money in there than I absolutely have to.

 

You should change to one that is.

 

You gotta think about the future. Do you want to work until you're forced to retire at 68 years old and hope Social Security is still around, or do you want to retire at 50 and live large off of the interest from your savings and investments?

 

100% of my purchases (besides my house) are cash. Yours should be also. Problem solved.

 

what if your hobby is photography? that ish ain't cheap

 

Why?

I haven't seen many interest-bearing checking accounts that generate interest on balances smaller than $1000-1500, and the rates they offer aren't nearly as high as my savings account... so where's the value? Add to that the fact that fees are higher and more difficult to avoid, minimum balances are higher, and they're generally less convenient due to a lack of ATMs, etc... and I just don't see the upside.

 

interesting.. i was reading some articles on self-control and they said that in studies (this one was on eating), people that exhibited self-control in the studies for prolonged periods actually had parts in their brain that controlled self-control become weaker.. the solution was to not "over use" self-control.. but it wasnt suggesting doing a splurge..

i kind of agree with this study but i know everyone has a different propensity for self-control in general.. were all raised in different ways and i think genes/enivoronment contribute to this as well.