Money in the bank!

[Bignate603]

well when something breaks, and you dont have the cash, i have no problem going out and getting 6 months same as cash. I learned my hard lesson in my early to mid 20's about fiscal responsibility. Paid off all my credit card debt a few years back and havent had one since.

Not everyone on ATOT is a millionare. sheesh.

Or you could just put some money into savings and use that when you have a problem. You don't have to be rich to have a few grand in savings.

 

[soulcougher73]

I'll just think of it as he is donating to charity, which just happens to be the US government. It's ok. I do the same thing. As DrPizza said..you are only missing out on like $120 in interest if youre lucky. Nothing to write home about.

 

[EagleKeeper]

Been working well so far. had to replace damn near every appliance in this house... in fact... everything has been replaced. Furnace, AC, Dishwasher, Hot water heater, washer/dryer. that shit aint cheep.

Advisable to get extended warranty plans on the washer if a low end model.

We had a low end Kenmore that came with the house.
Gave out after two years.

Wanted to upgrade, but the seller did not get us the sales receipts to us in a reasonable time frame to allow a return

 

[Anubis]

I don't understand why you would do that is all. Adjust your withholding so you don't overpay - you get to enjoy your money immediately.

i make enough that the extra i overpay makes absoutly no difference in my spending habits. its simply easier to declare 0 and never worry about owwing the govt money

 

[jlee]

On a $10k return, over the course of the year, you average having overpaid by about $5000. Well, since you don't get it back, usually until at least February or later, we'll say the average is $6000 overpaid. Let's see... how much interest are banks paying these days? Even at 2% (you're dreaming), that's all of $120 in interest you miss out on. And to the "you have that money to spend sooner" person - ahhh, living paycheck to paycheck, huh? Spend it as soon as you get it?

$10k return?

hah damn, I wish I had the money that AT has...hell I only paid about $7k in federal tax.

 

[Elbryn]

Advisable to get extended warranty plans on the washer if a low end model.

We had a low end Kenmore that came with the house.
Gave out after two years.

Wanted to upgrade, but the seller did not get us the sales receipts to us in a reasonable time frame to allow a return

i'm on the opposite of you on this one. if i'm getting a low end appliance and it breaks, i'd rather go get another appliance than have to wade through the extended warranty crap. say i paid 3-4 hundred bucks for a washer and 50 for the warranty. if i take a look and the issue is not an easy fix, the warranty means having to wait up to a week for some guy to be scheduled to come out and take a look. more than likely he doesn't have the part on hand and needs to order it. comes back a week and a half later and fixes the machine. with two kids and the vast amount of dirty clothes that pile up, its easier and faster to go out and buy another washer to get back into business.

kenmore is pretty shitty though. we have a kenmore washer/dryer. washer needed the primary circuit board replaced in the first year an the dryer motor died midway through year two.

 

[HydroSqueegee]

Or you could just put some money into savings and use that when you have a problem. You don't have to be rich to have a few grand in savings.

true. its been money in, money out this past year. Weve had to buy a lot of big ticket items in this house, but not all were necessary. And we had our third kid. The heater dying this past fall crushed what we had in savings. that shit isnt cheep.

 

[HardcoreRobot]

no witholdings set for either wife or I, still owe 3K

 

[bigrash]

You get a title shot any time you want.

Haha, I came in here thinking the same thing.

 

[ViviTheMage]

you cant explain this to people who dont understand math or economics

believe me, ive tried

people seem to want to have a big chunk of money in a tax refund then slowly over the source of paychecks.

I prefer to have to break even, or owe very little.

 

[Phoenix86]

This won't go well for you.

If he payed off the loans before the interest kicked in and had extra for cash in the bank I'd say it went just fine.

 

[SlitheryDee]

I'm going to owe around 4k.

 

[GotIssues]

Been working well so far. had to replace damn near every appliance in this house... in fact... everything has been replaced. Furnace, AC, Dishwasher, Hot water heater, washer/dryer. that shit aint cheep.

He's probably referring to the fact that you financed small, piddly things and things that aren't necessary (TV). If you have to finance a TV, you don't need it, regardless of the rate.

I'm all for favorable rate financing, but the amount of money you "save" by 0% financing on such small ticket items is insignificant and not worth the hassle. People that "take advantage" of those deals generally are the ones that can't afford the item to begin with, and eventually these kinds of buying habits turn ugly when there is a life hiccup the person doesn't expect.

 

[SlitheryDee]

He's probably referring to the fact that you financed small, piddly things and things that aren't necessary (TV). If you have to finance a TV, you don't need it, regardless of the rate.

I'm all for favorable rate financing, but the amount of money you "save" by 0% financing on such small ticket items is insignificant and not worth the hassle. People that "take advantage" of those deals generally are the ones that can't afford the item to begin with, and eventually these kinds of buying habits turn ugly when there is a life hiccup the person doesn't expect.

I financed my TV. I can afford to pay it off at any time, but I really don't see the advantage to paying it off before I have to.

 

[GotIssues]

I financed my TV. I can afford to pay it off at any time, but I really don't see the advantage to paying it off before I have to.

There is no advantage to waiting pay it off, either. Unfortunately, there are gigantic disadvantages if you don't. Generally, the 0% deals are for x time, and if you don't pay a certain amount at x/2 and pay it off at x, you are charged a full interest rate for the entire time, and that rate is in the range of 20%+.

So you are right, there is no advantage to just buying it outright. There is no advantage for putting it off either, and it comes with a handful of disadvantages. Frankly, I'll take 0 gain (upfront) over 0 gain plus a bunch of hassle (financing) for such small ticket items. Unless it's a significant amount of money or there are rewards of some type, financing has no positive value.

 

[CPA]

well when something breaks, and you dont have the cash, i have no problem going out and getting 6 months same as cash. I learned my hard lesson in my early to mid 20's about fiscal responsibility. Paid off all my credit card debt a few years back and havent had one since.

Not everyone on ATOT is a millionare. sheesh.

You are missing the point. You had thousands of dollars available to you, yet you decided it was in your best interest to give it to the government and let them hold it for you for up to 16 months without any interest.

Tell me how that makes sense and explain to me what being an ATOT millionaire has to do with it?

 

[CPA]

I agree.

Unless you are a financial genius, you cannot predict your exact tax situation for the next year.
It is better to have a small refund than a tax bill.

How much interest are you earning on that tax refund anyway? <$10???

Bullshit. Are you telling me you can't come to 95% of your overall tax bill by year's end? Tax law doesn't change every month, particularly the major components - Exemptions, Credits, Itemized Deductions.

Hell, you only need to re-assess mid-year and I suspect you could get within 90% of your overall tax bill.

 

[CPA]

I'm going to owe around 4k.

Same here and I have no problem doing so.

 

[HydroSqueegee]

He's probably referring to the fact that you financed small, piddly things and things that aren't necessary (TV). If you have to finance a TV, you don't need it, regardless of the rate.

I'm all for favorable rate financing, but the amount of money you "save" by 0% financing on such small ticket items is insignificant and not worth the hassle. People that "take advantage" of those deals generally are the ones that can't afford the item to begin with, and eventually these kinds of buying habits turn ugly when there is a life hiccup the person doesn't expect.

your damn right i didnt need the TV. it was an impulse buy. $1000 at 36 months 0%. and i dont consider 1000$ a small ticket item.
I will definetly agree that if i have a life hickup, id be screwed. But my job isnt going anywhere for the time being.

 

[JTsyo]

Same here and I have no problem doing so.

At $4K don't they charge a penalty?

 

[SlitheryDee]

There is no advantage to waiting pay it off, either. Unfortunately, there are gigantic disadvantages if you don't. Generally, the 0% deals are for x time, and if you don't pay a certain amount at x/2 and pay it off at x, you are charged a full interest rate for the entire time, and that rate is in the range of 20%+.

So you are right, there is no advantage to just buying it outright. There is no advantage for putting it off either, and it comes with a handful of disadvantages. Frankly, I'll take 0 gain (upfront) over 0 gain plus a bunch of hassle (financing) for such small ticket items. Unless it's a significant amount of money or there are rewards of some type, financing has no positive value.

Technically you're right. The money I would have used to pay for it on the spot is not earning me any interest currently, so there is no net gain for me in spreading it out over payments. It's a mental thing for me though. I won't make any other purchases in that price range as long as I'm paying on the TV, so I control my spending through financing. I only finance one such item at a time. There is potential for a massive interest charge if I don't pay it off in time, but I don't see something that I simply will not allow to happen as a disadvantage.

 

[GotIssues]

Same here and I have no problem doing so.

Doesn't really matter to 90% of Americans because 1) They won't do anything with the extra money they get per paycheck except spend it and 2) they are incapable of planning ahead to foot a large tax bill.

Inflation isn't a big deal, either. On a 5k refund, they sacrifice ~$80 in purchasing power ($5k * historical inflation rate (.0325) / 2 (because you aren't starting the year with a $5k lump but get it in equal distributions throughout))

TBH, getting a refund is good for a lot of Americans. Financially optimal? No, but a lot of people in a lot of situations, it's the optimal result for them.

 

[HydroSqueegee]

You are missing the point. You had thousands of dollars available to you, yet you decided it was in your best interest to give it to the government and let them hold it for you for up to 16 months without any interest.

Tell me how that makes sense and explain to me what being an ATOT millionaire has to do with it?

the point is, that money will not be invested and most likely will be spent on some type of home repair, appliance or some other bullshit. Im not the most financially savvy person out there. If its doled out in small amounts, it may get saved, it may not. If it all comes as one lump sum, that pile will sit in savings and not get used unless i need it. Thats my system ive come to use and it works for me. We had a large chunk last year that sat in savings and it slowly trickeled out when my wife was off work with a new baby then completely wiped out when the heater and AC needed to be replaced.
So different stroked for different folks. Now once all this shit is paid off, i can start saving again.

 

[GotIssues]

Technically you're right. The money I would have used to pay for it on the spot is not earning me any interest currently, so there is no net gain for me in spreading it out over payments. It's a mental thing for me though. I won't make any other purchases in that price range as long as I'm paying on the TV, so I control my spending through financing. I only finance one such item at a time. There is potential for a massive interest charge if I don't pay it off in time, but I don't see something that I simply will not allow to happen as a disadvantage.

You won't allow it to happen, but sometimes life happens. Say your house burns down (or some other major life event) the day you normally pay the bill. Now, on top of the crap you have to deal with that, a month later you get a bill for the interest. Yes, the liklihood of you missing the payment is low, but $0 < $x*(any probability of late payment).

That was also only one of the disadvantages. The fact that you have to deal with the hassle of the payments is the other. I value my time at more than $0 (not much more, but still...).

The main point of the original statement was that if you had to finance the TV in order to have it, then you shouldn't be buying it. As far as you financing it when you can afford to pay it up front, to each their own. There is just zero practical advantage (and entails disadvantages) to financing such a small and unnecessary item, which is why I wouldn't do or advise it.

 

[GotIssues]

your damn right i didnt need the TV. it was an impulse buy. $1000 at 36 months 0%. and i dont consider 1000$ a small ticket item.
I will definetly agree that if i have a life hickup, id be screwed. But my job isnt going anywhere for the time being.

I'm not saying I crap in a golden toilet or wipe my butt with Benjamins, but $1000 is not a lot of money in the grand scheme of things. A house, a car, college, or some other item that just isn't practical to buy with cash (i.e. If you walked up and handed them straight up cash, it would be weird) are big expenses.

Maybe I was raised differently, but to me, a candy bar, magazine, or something under $20 is an impulse buy, not a $1000 TV. If you are willing to signicantly increase your financial risk for a TV, then you have your priorities messed up.