You can have the best credit rating in the world, but if you lose your job and your furnace blows up, I'd think that savings could help keep you from falling deeper and deeper into a hole. Credit card debt has helped people not understand the dire financial situation that the were getting into the last few years (not all, but in general) and which many are finally starting to realize, as they use up their credit. And, there are some strong arguments that the debt of the country as a whole have significantly inhibited our willingness to stand up against injustice and for the best interests of our people (as opposed to corporations), both at home and abroad.

I think you and your friend have a good point, David, and I do use credit as well, but I think that there's real value to saving, and I think many, if not most, financial advisers would agree.

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I would still rather have cash on hand to pay for an emergency expense than charge it and have to pay interest for months trying to pay it off.

Well, the notion is that all the time you've got money tied up in savings not earning significant interest costs you more than the interest on credit.

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That's a hard concept for me to accept. Not the good credit rating - but that savings isn't important. I guess I'm assuming an extreme scenario here - but not an impossible one. assume zero debt except for house. Assume DH loses job. with what we have in savings we have a 3 months at current rate of spending. Add unemployment, willingness to take on cc debt, and a curtailing of spending means 6 to 7 months before we have to sell the house, dip into retirement or do anything that drastically effects retirement.

Of course, wealth in sense of big money isn't my real goal. More a comfortable retirement- that won't start until I'm 70.

ideally - 0 debt except for house . 6 month of saving - 1/2 in an easy to get to place - the other 1/2 in something like a ladder CD account. Use the equity in the house to do home improvements. Retirement - as long as the home improvements haven't outpaced the value of the house-has a whole bunch of options.

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I haven't thought this through, but off the cuff, I think you can't evaluate these things divorced from overall economic standing. For a big wheel financial advisor, savings proportionate to income are probably not a good strategy. For people living a little closer to the edge, I don't think it's as clear.

Easy credit isn't that easy anymore either, from all reports. Banks are pulling back on credit lines and the kind of liquidity that would see you through a job loss or house fire or something simply may not be there for a lot of people.

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I'm looking at his writing on the subject and I'm not really doing justice to it. Suffice to say that it has to do with the financial value of "risk" and how that plays out as "Emergency funds/savings" vs. credit.

In short, risk is something that can be calculated and factored and the numbers swing hard to credit over savings.

Emotionally and intuitively that's now how people feel about risk or money but that's the way the numbers play.

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Let me put it this way:

How hard would it be for you to save $7,500?

How hard would it be for you to get $7,500 in credit?

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I have more savings than I probably should, but I would get twitchy without it, because I had it drilled in to my head early and often that that was how things were done.

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How hard would it be for you to save $7,500?

How hard would it be for you to get $7,500 in credit?

I understand the argument in terms of how important it is to have good credit for exactly this reason, but I guess I'm confused at why--once you have good credit--having cash on hand wouldn't be better than getting stuck with an interest payment. Because even if my savings is only earning 1% while it's sitting there, isn't that better than paying 5% (on the low end) for credit debt?

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FUCK MY BOSS

sighhh...

Scene: 6:00, Friday Night

Boss: Trudy, can you stay a little late?

Trudy: Sure

Scene: 8:55, Friday Fucking Night

Boss: So, was this makeup time, or overtime?

Trudy: It was overtime

Boss: Really? How can it be overtime when you're absent so much?

Trudy: I was very sick for two days in the beginning of January. I have not been out since then.

Boss: Really?

Trudy: Really. I can show you the chart.

Boss: Oh. It must just seem like it because you're late all the time.

Trudy: I haven't been late since my review in November.* I can show you that chart too. I can be a real pain about these charts.

Boss: Fine, well, I really need to get going. Bye.

FUCK MY FUCKING BOSS, FUCK FUCK FUCK FUCK FUCK FUCK

Sighhhhh... I will go to HR on Monday. We will talk about this AGAIN. "Either I need hazzard pay to work for a difficult partner or you need to move me to a sane individual". And then I call my recruiter.

No. No. Then I go perform at Caroline's. Hee. See, that's the part that matters, you know?

Friday, btw, was on five hours sleep because I'd been out until midnight (and couldn't sleep until three) recording my voiceover reel for two hours and rehearsing the Caroline's show for three. Oh, and I hit on a hottie -- by flyering him for the Caroline's show. Seriously? Best way to flirt with a guy EVER.

:: oh so casual:: "Oh yeah, I'm performing at one of New York's premier comedy venues Monday. You should come." ::flip card over:: "Oh lookie-here, I put my phone number on the back in case you need to check anything" ::Captain Jack smile::

SLY LITTLE SMILE BACK OH YES OH YES OH YES HE DID

Fuck my boss. Seriously.

* Please note. I hadn't been late particularly often BEFORE my review in November. Or absent. And HR would not back me up on this. In my review I LITERALLY said "oh, well lets get the attendance sheet and check" And incompetent HR bitch LITERALLY said "well, just make it clear to her that you're there"

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Let me put it this way:

How hard would it be for you to save $7,500?

How hard would it be for you to get $7,500 in credit?

If I needed to be able to use it tomorrow?

I'm not arguing the overall point, really - in fact, I need to take a look at these things myself, because I could stand to throw some savings at my credit cards right now myself. But I feel like there's a floor here that's not accounted for, where savings do function as a better emergency net for people who aren't in a strong starting position.

(And, actually, I personally don't have near that amount of available credit, assuming all my sources had zero balances.)

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