Making large purchases while paying down debt

[Angelorum]

My dh and I are having a disagreement about this. The situation is this: we have some consumer debt. It's not an outrageous amount, but it is likely going to take us over a year to pay off. Mostly the debt is the result of me going to school and not watching the finances as closely, plus a surprise pregnancy and having to move quickly and unexpectedly due to a crappy landlord. We are going to need to replace my computer before our debts are paid off. We know what we want and how much it's going to cost. I would rather set aside a little money for a couple months to pay for the new computer. Dh thinks it makes more sense to use that money to pay down the credit cards and then essentially replace the debt by buying the computer on credit. His rationale is that it will cost more money (in interest) to save up and pay cash then it will to pay as much on the debt as we can now and then put the purchase on the credit card when we can't wait any longer. He's right from a numbers stand point, but dang it, I don't want to have to buy it on credit! I couldn't think of a good reason not to, I just kept saying it doesn't feel good to do it that way. He said, "of course being in debt doesn't feel good, but false assumptions (the assumption that paying cash would be better) shouldn't feel good either"

So is he right? or is there some other reason I'm not thinking of that we should save up and pay cash?

[applecider]

Personally, I think you are right and only because by saving up and paying cash, you are getting yourself in the mindset that you cannot put things on credit and purchases must be saved up for. From a numbers standpoint, I really don't know which would be better, but from a mental standpoint, I would do the saving!

[newbymom05]

Pay off the debt and then try to save to pay cash for the computer. My computer would have to die before I'd go into debt for another.

Try Best Buy or Conn's and see if you can get it w/ a 12 mo no interest cc. Just make sure you figure out a payment plan in advance and pay it off before the due date.

[Ellien C]

From a numbers standpoint - he's right. BUT - there is more to debt than numbers. There is self-esteem and discipline. There's making a commitment to yourself and keeping it. Sometimes that's worth the extra interest.

I'm going through this myself with carrying about a $3500 balance when there is enough in savings to cover it. I'm seeing how much I can pay off before maternity leave. I have specific things I'm allowed the spend the savings on and other things that are supposed to come out of "operating income." Anyway, I *could* pay off the CC and will after a certain point, but that way lies madness. I can't just charge up the CC and steal from savings to pay it! That interest charge everything month is a HUGE reminder to keep things off it.

[TiredX2]

Your husband is "right" from a financial standpoint.

That doesn't mean it is the best choice for you as a family, though.

Personally, I would continue paying the credit cards off while watching for the "perfect" computer (definately on sale, preferably w/a 0% offer). Then I would put the computer on card/new card when the time came. I don't know why you will need a new computer though--- is your current one nearing break down (so it is unpredictable when you will need a new one) or do you just predict increased computer needs?

[leavemealone]

I would put some money aside each week/month until I'd saved up enough money to pay cash for the item. This would allow me to keep paying on debt and to start to get into the habit of saving money and paying cash for items. I would consider putting something on credit if it were something I truly needed (such as a new furnace, or water heater) rather than something I could do without in many cases (new computer or TV).

[Delicateflower]

He's right financially, you're right psychologically. I'm right practically when I say make with your computer until the debt's gone and you can afford it.

[TiredX2]

Originally Posted by Delicateflower

He's right financially, you're right psychologically. I'm right practically when I say make with your computer until the debt's gone and you can afford it.

[GnomeyNewt]

As other posters suggested, don't replace your computer until you have to! Do not go into debt to do it either.

Last year my laptop died (we think it is the harddrive) --> this caused us to fix my desktop power supply which had burnt out (it actually smoked on me) which was only $65 to fix. Than my monitor died. I made due for a few weeks on my crappy 7 year old monitor that had about 256 color (maybe more but it didn't display color correctly, which lots of colors do come in handy sometimes when doing graphic related tasks). I than found a great discount during black friday for $80 19" widescreen at newegg.com (had 2 different discounts applied and I just today got some of that rebate in the mail!).

I am a web programmer. I need my computer to work. But I am also cheap and will not add even $1 to my debt.

2 things to consider:

1) Just fix your computer instead of buying a complete new one. We have been replacing parts in my computer for years --> upgrading when the part dies.

2) Have an emergency fund. We have $1,000 in emergency funds saved which does not go to debt and we keep on hand for such problems as the computer dying or your car needing a repair. (This is from Dave Ramsey suggestion which I've followed for about 1yr and its worked out great for us).

The only way to stop getting into to debt, is to stop buying with your credit card -- no matter the circumstance -- at least for us that is how it has been.

[Delicateflower]

ROFLOL, Tired, did you gift me a DDDDC?