The truth is, I should have planned better.
I have several expenses coming up in the next two months that I really should have given some thought to, you know, before right now. Especially because they’re all popping up between September and October, then completely dying off after that. Why does that always happen? Between now and the end of October, I have to come up with the money for:
– My hotel room from #FinCon12 ($340 – shame on me for not recruiting a roommate!)
– My personal property tax bill ($187)
– An appointment with the eye doctor and a massive supply of contacts (~$150)
– A class I need to maintain my teaching certification ($150)
– Probably another vet visit because my cat’s ear still isn’t cleared up (~$100)
Yikes! That’s a pretty decent chunk of change, and this figure assumes that some other emergency doesn’t pop up to add to this hefty bill. So how am I going to pay for all this, since it pretty much has to be paid out all at once? I could dip into my freshly-minted emergency fund I suppose. But that option is unappealing for a number of reasons, not the least of which is that it took a lot of discipline and dedication to build that thing up – the last thing I want to do is dig into if I don’t absolutely have to.
Nope, I’m going to take a different approach. I’m putting all of these charges on the interest-free credit card I opened up back in April, and then I’ll just pay it off at my leisure over the next couple of months.
What?! Why would I add charges to a credit card when I have the cash in the bank to pay for them now? What kind of PF blogger am I?!
Well, for one thing, I’m the kind of PF blogger who likes flexibility. Putting these expenses on my interest-free credit card gives me flexibility with my monthly cash flow because I’m not pressured to pay them off right away for fear of racking up interest charges. Also, I don’t have to dig into my precious stash of cash. Win-win.
I’ve never had an interest-free credit card before, but I’m making a new personal policy: keep an interest-free credit card around at all times. I love having the ability to choose how quickly I want to pay off any unexpected expenses that pop up without freaking out and/or having to touch my emergency fund. I use a credit card for all of my daily expenses anyway because I love the rewards, so I’m used to being disciplined about paying off the bill. However…..
….Danger, Will Robinson: This strategy is not for everyone. If you choose to adopt this strategy on your own, be honest with yourself. Will you really pay off the charges before the interest-free period expires? If there’s even a sliver of a chance that you won’t have the discipline or ability to do so, do not use a credit card to cover your ass, just pay cash. Also, remember that no credit card is interest free forever – pay careful attention to the terms of the card so you don’t get screwed. One last thing – I probably wouldn’t charge any more than I have in the bank, just in case.
What about you? How do you pay for unexpected expenses?