Surprising Information about Suze

iVillage Member
Registered: 07-02-2008
Surprising Information about Suze
8
Fri, 01-09-2009 - 10:57am

After I worked 14 hours yesterday (both jobs) I couldn't just go home at 12:30 a.m. and sleep so I had to wind down. I turned on the Oprah I had taped.


I was shocked to hear Suze say that if you have c/c debt you shouldn't have a savings. I actually rewinded the DVR to make sure I heard her right.


I wanted to sit up and say, "well, what happens if you are living paycheck to paycheck and something MAJOR happens (car break down, medical emergency) and you have NO money saved?" That expense goes ON a credit card.


I just didn't think that was good advice at all.


Also I know you guys posted on Mary Ann's post about Suze's 2009 action plan.


Don't spend money for

iVillage Member
Registered: 10-16-2007
Fri, 01-09-2009 - 11:14am

Hi!


I imaging she was saying that you should use your savings to pay off your cc debt and then start the savings after all that is paid off. Because what would the sense be of having all this credit card debt and then socking money away to a savings.


If I could cut my coffee habit I could easily not spend money for one day, I already don't use my credit cards on a weekly basis the balances are only up because when I was on maternity leave I didn't plan that well and now I have to pay the price, the not

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iVillage Member
Registered: 02-25-2008
Fri, 01-09-2009 - 11:18am

Hi,

Since I have become so proactive in my debt repayment planning, I have been reading a lot and doing a lot of researching online and saw yesterday's Oprah. Yes, Suze did say not to have savings till all debt is paid off and mathematically it makes sense, since you are not making as much interest on your savings as you are paying to your credit card. So financially it is a loss. The impression is that once you pay off the credit card you have that amount "available" in case of a true emergency. On the other hand, if you do not have an emergency, then your e-fund money is just sitting there not earning much interest. However, I would be so scared of that. So, although I am following her method of paying the higher interest cards first, I am also saving in my e-fund, as Dave Ramsey professes. So I guess for me what has worked is having all the resources at my disposal from the professional financial gurus out there and the great advice that I am getting on this support group to come up with a plan that seems to fit me well.

As far as Suze's 2009 action plan goes:

Don't spend money for one day: I have done this. In fact dh and I did it for a few days already this month. DH is very proud that he is not buying coffee from starbucks and either carrying lunch from home or eating at different lectures/ conferences that they have every day.

Don't use your c/c's for one week: I have not used cards in a pretty long time. I do use a card for my monthly expenses and there is a maximum limit set. We pay it off at the end of the month so nothing carries over.

Don't eat at restaurants for one month: This is something i am less certain about. The audience also groaned when Suze said this and it seems that Suze herself was less certain about this working. We have definitely cut down eating out by about 60-70% but we like it as part of our weekly outing. But recently there have been times when we have not gone out to eat in 2 weeks.

This is a great post and I hope others share their opinion on these 3 steps too.

Best,
EL

iVillage Member
Registered: 01-23-2007
Fri, 01-09-2009 - 11:30am

We already do these things on a regular basis. Our only area where we need to cutback is Friday night pizza. In fact, tonight it will be spaghetti instead of ordering pizza, because we have it on hand and we do not have cash to throw around.

I'm surprised about what Suze said too. I just read that she recommends 8 months of living expenses in savings, but you're right. If you don't have savings and something happens, you'll pull out the CCs. That doesn't make sense. I don't have TV, so didn't see the episode.

Dee






iVillage Member
Registered: 04-10-2003
Fri, 01-09-2009 - 11:48am

I can see her point. If you have savings that isn't earning as much interest as you are paying, then it makes sense to put the money on the CC's. Assuming you are not charging for frivilous things, then the room will be there IF you need it for an emergency. IF you don't have an emergency then you have paid the CC off faster.


The only arguement I have against this idea is the fact that not ALL emergencies can be solved with the CC. I came across this problem in the fall when I needed work done on my dryer vent and the contractor who came highly recommended was a local guy who didn't accept CC payment, just cash or cheque.


So I think my plan of a $1000 savings is a good balance. Small enough that it makes sense and big enough that it SHOULD cover most problems!


PS - Dee I noticed you and I have the same weight loss goal! I just started today so my little runner hasn't moved :( Any specific plans to get there?


Bex -


"Yesterday is history, tomorrow is a mystery, today is a gift -thats why its called the present."


Bex -

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iVillage Member
Registered: 03-26-2003
Fri, 01-09-2009 - 11:56am

<<<<

We do this quite a bit. We usually spend money just 1-2 days a week (payday and grocery day) and the only exception to that would be to pay a bill when one of us gets paid, whenever that happens to be, and to get gas. A tank of gas will last me up to two weeks and for DH it's usually 7-10 days, so we fill up when we need to. As for restaurants, it depends on what you'd consider a restaurant. If we don't have leftovers, DH will hit the drive-thru for his $2.19 lunch. I don't know that I'd call that a restaurant, but it is eating out. =c)

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Sarah
iVillage Member
Registered: 03-17-2003
Fri, 01-09-2009 - 11:57am

There is a school of thought that contends if you are in debt you don't have any savings.


Ask yourself what the APR is on your credit card debt.

iVillage Member
Registered: 04-28-2007
Fri, 01-09-2009 - 12:04pm

there are already days i go without spending money and definitely weeks i dont use a CC since theyre all maxed out! everything we bought on a credit card was food and gas anyways when SO was on workers comp. its not like we had a shopping habit. believe me if we did id probably actually have clothes lol.


restaurants are another thing because we definitely blow too much money on fast food. i would love it if we could control ourselves not to go for a whole month. right now my goal is one week lol. im just not a good cook and SO gets home late from work and is too tired to cook. one of my new years resolutions is to make 1 new meal a week. hopefully it helps us out

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iVillage Member
Registered: 06-18-2004
Fri, 01-09-2009 - 1:20pm

Suze's been advocating the "pay off debt, then save" way for as long as I've been watching her.