How did your BF/FI pay for the e-ring?

[janinegirly]

The "putting cash under the mattress" concept is a barb at people being old fashioned. Same concept. No need to take it personally.

I also think you have bad debt and good debt confused. BAD debt is when someone has a credit card and doesn''t pay off the balances and is going into debt. GOOD debt is someone with credit cards who buys items with the card and pays off balances, or has a mortgage which they are able to make payments on timely. It''s GOOD b/c it builds good credit and allows for leverage which allows for financial growth. Of course credit IS a way to increase purchasing power--that''s the definition of credit! If you have good credit, you have a higher credit line and can buy more at any moment in time. If you have good credit, you can obtain a mortgage at lower rates which allows you to buy a house you could not afford by counting cash in your savings account. Same concept. This is really finance 101. Anyway, I''ll get off my soapbox, I think I''ve made my point..

 

[allycat0303]

I''m not going to keep repeating myself about the mortgage thing, because you aren''t reading my posts, about why I feel that way. It''s ok. I don''t take it personally. Thank you for the lesson in finance 101. I feel much more educated now.

 

[JCJD]

None of the above, so I didn't vote. The jewelry store has a layaway payment program - as long as you're making payments every month (if I remember correctly) they will hold it for you.

 

[janinegirly]

allycat, you''re very welcome for the lesson in finance 101, anytime.
of course i read your posts, i responded in detail but don''t feel the need to address every random detail. i can''t comment on why it was so easy for you to get a mortgage, because i don''t have all the facts. If you''re telling me you and your bf got one very easily without any credit history, then good for you, but obviously they must have felt comfortable due to other factors which i obviously can''t comment on. you could''ve gotten a short term ARM, put down a large down payment, a million factors. Banks don''t engage in charity, so obviously something made them feel comfortable.
Now that you and your BF have broken up, I wonder how it is working out with your joint purchase (i personally wouldn''t buy without being married). Anyway, it''s a great achievement to have made a real estate purchase at a young age.

 

[ladykemma]

100 percent behind allycat. No debt. old fashioned all the way.

janinegirly, perhaps you are one of the few who can manage their credit cars and pay off in full each month, but i have several friends whose marriages and lives were destroyed by debt

My church teaches no debt for any reason, and is (I think) ally's former church. certainly her parent's church. mortgage and certain student loan situations are the only allowable reason. use of other people money (what you call leverage) is fine until the next layoff or economic depression hits - then your house of cards falls down. remember black thursday? (history people: was it thursday?) people were jumping off buildings because thier imaginary holdings went Poof. newsflash you don't own the house, the bank does.

"...I fear that a great majority of our young people, never having known calamity, depression, hunger, homelessness, joblessness, cannot conceive of such situation ever coming again. There are thousands of young families who could not stand a three month period without the threat of their home being foreclosed, their car reposessed, their electric and home equipment being taken back, and themselves being reduced to unbelieveable rations in the process. "
S.W Kimball

"let every head of household own their home outright, free from mortgage." Reuben Clark

preparedness is a way of life for us. living within one's means. finance 101.

i will start another thread on this, living debt free- provident living.

 

[ladykemma]

Date: 10/16/2006 3:27:30 PM
Author: janinegirly
ally, welcome to 2006, there''s no need for cash anymore, cash is risky and old fashioned. Withdrawing large amounts of cash also raises red flags for money laundering. Credit card purchases offer protection against fraud, a paper trail etc. Most people who are considering marriage should have a healthy credit line I would hope, and it doesn''t mean you spend to the limit! I never go anywhere near my limit (i spend 2K a month at most, and have a credit line close to 10x that amount). but it''s good to have the option for big purchases, trips, jewelry, emergencies, etc. etc. just in case.
There are people who have no financial discipline who put crazy things on their cc and leverage their credti for items they can''t afford (stupid), but those types of people would be no more disciplined with hard cash.

janine - you can write a shhhhh ..... looks around..... a CHECK!

 

[goldenstar]

Ladykemma-

Out of sheer curiousity, would your church not allow you to use a credit card but pay in full each month? I was just wondering. Some people use credit cards but have zero debt because they make it a habit to pay it off at once.

I see the value of living within your means, but what if you''re just using the card to get airline miles or other benefits, not to buy things that you don''t have money for?

This thread has grown into something really interesting.

 

[ladykemma]

they dont monitor, they just give advice.

i use my debit and my credit card, i just make sure it is paid in full each month.

 

[Fancy605]

My b/f just paid for a ring in full! How exciting is that? Perhaps I shall come of the list soon? It is being custom made, and the final stages will take place this week. EEEK! Perhaps I will be able o post a photo of the wax soon.

 

[monarch64]

My DH paid for my e-ring first with a down payment, and then paid off the balance with part of his quarterly bonus check a couple of months later. Yes, he could''ve saved maybe $50-$100 in interest by waiting for his bonus check and then buying the ring right out, but we had a timeline and that''s just the way it worked out. We don''t really live our lives based on extreme thinking, meaning we save enough money for a rainy day, but we don''t go without certain things we feel are important to us, although not necessities, just in case the stock market should suddenly crash and we lost everything. I grew up on a farm, and my DH is a pretty good outdoorsman, so I think between the two of us, we''d probably be able to survive should we not have a roof over our head because we didn''t pay off the entire balance of our credit card this month.

 

[Olive Oil]

Date: 10/16/2006 7:06:09 PM
Author: janinegirly
Now that you and your BF have broken up, I wonder how it is working out with your joint purchase (i personally wouldn''t buy without being married). Anyway, it''s a great achievement to have made a real estate purchase at a young age.

I''m normally just a lurker, but this comment really got to me. Ouch, janinegirly! I hope that wasn''t supposed to be as mean as it sounds.

Back to the original query, I''m not engaged, so I can''t give a real answer. I do use credit for some things, but I do like the idea more of the engagement ring being something that is saved for, rather than a "fast food nation" type of instant gratification. My boyfriend and I are both poor grad students, but I would prefer him to save for a small, modest ring than use credit for a ring he really couldn''t afford. I see a lot of sentimental value in having the ring represent that stage of your relationship. I can see looking at a small diamond when I get older, and having fond memories about how despite being as poor as dirt, being very in love. But maybe I''m being overly mushy here...

 

[allycat0303]

Well that is really unkind of Janine. However, I will answer...because I find it really amusing when someone thinks they''ve hit a low blow but it doesn''t feel nearly as hurtful

............................Because I put down 33% out of the 35% downpayment, because my boyfriend was going to pay for the mortgage while I finished school, he offered to buy me out for 33% of the current real estate value, or the appraised value by the city. Which is nearly double what I originally put down as a downpayment. He cut me a check on the day we broke up , and our laywer has started the process of transfering ownership. Because we never lived in the house together, I feel like this is the fairest deal possible for both of us.

We could afford what we did because both of us scrimped and saved, and ate kraft dinner for 4 years and worked like slaves. Because I won several scholarships and worked odd jobs as a tutor, and later as a grad student. I went nearly 3 years without buying clothing that cost more then 20$. And he worked full time during the night as a sercurity while he went to school. Of course, we were lucky to live in a place where education is inexpensive, but we made a lot of sacrifices.

Incidently Janine, this is the last comment I am EVER addressing to you. Because I find you unkind. And not opinonated as many of the wonderful ladies on PS are. Just unkind. Things may get heated, and people may differ in opinon. But the ladies here will ALWAYS refrain from personal and cruel attacks. That''s something you are going to learn once you are here longer.

Olive Oil: Welcome to the board. I hope you don''t take this display as the norm around this board. This is usually the most wonderful, supportive forum.

 

[janinegirly]

allycat: really no loss to me if you never respond to my comments. you should try to not take things so personally. You may find me unkind, I find you to be stubbornly oppinionated and all over the shop. But then, we are both judging each other by anonymous posts so who knows, maybe we're both wrong. To each her own. On a positive note, you do deserve kudos for your med school achievements and it's encouraging that you and your bf settled the real estate purchase smoothly post break up, that's usually where things get messy. Your bf sounds extremely understanding.

 

[janinegirly]

lady kemma: i agree 100% regarding no debt. No bad debt that is. I''m actually v.conservative when it comes to purchases on credit--I make no purchases unless the money is in the bank to pay off balances each month. That leads to spotless credit history. But i agree, if someone is unable to budget accordingly, by all means, wean yourself off the cards, cut extra ones up, pay in cash so it reins in unnecessary expenses. But my point is there is no need to be afraid of credit cards and pay for everything in cash. Or afraid to have a mortgage (an extreme example I know, but it''s the same concept). Because these are forms of good debt which build financial health and increased buying power. It''s very common for people to fear buying real estate because they don''t want to carry a mortgage/debt and think they can''t afford it. Each month you pay rent is money down the drain. Each month you pay a mortgage is money contributed to tangible equity. Anyway, as far as rings go, if I were a guy, I''d only buy within my budget but god knows I wouldn''t be afraid to put it on a card--it''s convenient and possibly a free airline ticket in the process!

 

[Julian]

I think the house comment was hurtful in black and white, but perhaps it wasn't meant to sound so harsh.

But I have to chime in about the finance 101 thing. My parents are well off, but they come from the "credit cards are scary" era as well. They bought homes with cash. Heck, my first car was bought with cash from them. Not wads of 100s (ha ha) but with a check from the bank. I have no idea why they did this -- the money market accts & CDs yielded very low interest and they could have done other things with the money to further serve their lives.

I think money is a tool. If you're smart, you can really make it do some incredible things in your family's life. I think that's what Janine is trying to explain. There is no way in heck I will ever be able to convince my folks to get a credit card - though banks are always calling and trying to entice them! And I have never carried a credit card balance. Ever. Still doesn't convince them!

But my generation is different. I think we understand technology more and are more comfortable making the system work for us.

That means using credit cards on higher tag purchases and paying them off immediately. MUCH better than writing a check because 1.) You have theft/loss protection insurance built in on the item you just spend thousands for 2.) You get free airline miles or CASH BACK woohoo! & etc.

And it's the SAME thing as buying in cash since you pay it off IMMEDIATELY. I click on my online banking and send a payment to my credit card company when I get home. Click click click. Presto! That's what my DH did with my ring -- he charged it to his card (we got TONS of miles!) and paid it off immediately through online bank transfer. I guess that's the same thing as paying cash, just got a free bonus along with it.

Regarding building good credit, having a good payment record for anything - mortgage or car loan -- helps. I still remember my Economics teacher in highschool extolling the virtues of having an excellent credit history -- much better than having no record at all. And it helps you secure better interest rates on your next house, so it even SAVES you money to have a good credit history! More money in the bank for you.

As for the fraud protection, just sign up for credit monitoring. That way, anytime someone tries to open any type of account in your name/identity -- you get contacted FIRST. And... It can happen to anyone.

Heck, it happened to my aunt who is also a cash only person. Some bozo signed credit cards in her name. I think in this tech world, no one's safe from identity fraud. So it helps to be vigilant and proactive.

 

[Julian]

But then again, I read LadyKemma''s post and it rings true for people who don''t have discipline or are crippled with debt. And we need only look at the nation''s economy to see that many people don''t. Many American families are in severe debt... It is very very sad. President Bush even signed into law legislation that makes it tougher for people to declare bankruptcy. So many people were doing that after racking up enormous debt it was hurting our economy. That is not to say credit card companies make it hard for those who can''t stop spending what they don''t have to keep doing it. I don''t know what the solution is. I kind of look at it like a gambling problem -- for those with spending addictions.

So cancel my earlier post for those who charge things they don''t intend to pay off immediately! That''s an entirely different ballgame and an entirely different thread!!!!!!

 

[nejarb]

Paying for a ring with a credit card that isn''t paid off in full when the next statement comes is INSANE! Don''t do it! NO!
Just wait, and save the money in an interest-bearing account, until you have enough to buy the ring. OR get a less-expensive ring if you have to have it now. If you get a 5k ring now, but put it on a credit card and pay it off over the next year, you''ll end up paying ALOT more than 5k for it. If you get the ring in a year and save the money in an account that earns interest, you''ll end up paying less than 5k for it.

It''s interesting to see how people out there answer the Q you originally posed, but you shouldn''t base what you do on what other people are doing, becasue other people may be making poor financial choices. Money is more important than diamonds (even really special diamonds).

 

[appletini]

My DH put the ring on his cc, but he did that for 2 reasons. 1. He knew he''d be getting his bonus the next week and 2. We put everything on AMEX so that we can get the points to use for airfare, hotels, rental cars, etc (this came in very handy for our honeymoon)...or in my case Crate & Barrel gift cards. He is very adamant about paying his balances in full at the end of each month, he just prefers to have the added bonus of AMEX points that can be used for various things. Plus I love credit/debit cards because they are so convenient.

 

[goldenstar]

Date: 10/18/2006 10:07:45 AM
Author: nejarb
Paying for a ring with a credit card that isn''t paid off in full when the next statement comes is INSANE! Don''t do it! NO!

Just wait, and save the money in an interest-bearing account, until you have enough to buy the ring. OR get a less-expensive ring if you have to have it now. If you get a 5k ring now, but put it on a credit card and pay it off over the next year, you''ll end up paying ALOT more than 5k for it. If you get the ring in a year and save the money in an account that earns interest, you''ll end up paying less than 5k for it.


It''s interesting to see how people out there answer the Q you originally posed, but you shouldn''t base what you do on what other people are doing, becasue other people may be making poor financial choices. Money is more important than diamonds (even really special diamonds).

nejarb-
you really hit the nail on the head and got to the heart of why i really asked the question.

 

[KimberlyH]

My ring was purchased with a credit card that was paid off immediately. Hubby would not buy the ring until he had saved enough to cover the cost. Same deal for my wedding ring and I did the same with his.

We purchase most things using credit cards, but nothing that cannot be paid off at the end of the month. We take advantage of programs through our cards such as partnerships with Exxon and Southwest using our cards and earn free gas and miles for air travel, things we use frequently.

 

[aljdewey]

Date: 10/17/2006 9:23:41 AM
Author: janinegirly
lady kemma: i agree 100% regarding no debt. No bad debt that is. I''m actually v.conservative when it comes to purchases on credit--I make no purchases unless the money is in the bank to pay off balances each month. That leads to spotless credit history. But i agree, if someone is unable to budget accordingly, by all means, wean yourself off the cards, cut extra ones up, pay in cash so it reins in unnecessary expenses. But my point is there is no need to be afraid of credit cards and pay for everything in cash. Or afraid to have a mortgage (an extreme example I know, but it''s the same concept). Because these are forms of good debt which build financial health and increased buying power. It''s very common for people to fear buying real estate because they don''t want to carry a mortgage/debt and think they can''t afford it. Each month you pay rent is money down the drain. Each month you pay a mortgage is money contributed to tangible equity. Anyway, as far as rings go, if I were a guy, I''d only buy within my budget but god knows I wouldn''t be afraid to put it on a card--it''s convenient and possibly a free airline ticket in the process!

I think you misinterpret what''s been said by a few.

They are aware of the power of credit, and they are also aware of the potential for abuse......and they (Ally and others) have made a choice that they feel works best for them. I don''t call that being afraid. I call that being honest with yourself about potential temptations and being smart about what your individual tolerances are.

Look, the argument could easily be made that alcohol isn''t bad and shouldn''t be feared.....all one has to do is drink responsibly, right? Stop at just one glass of wine, right? But there are some folks who cannot do that.....people who struggle with alcoholism don''t have the ability to just "have one" and then stop. So, they choose to avoid alcohol altogether.

Same thing with credit - it can be abused, and it can have life-altering negative consequences. Those who feel particularly vulnerable to being seduced by that power are SMART to choose another path that works better for them.

There is no ONE right way for everyone.....and therein lies the power of CHOICE. What is right for me may not be right for you, and vice versa.

T, too, have a healthy respect for the power of credit, and I do use it. Having said that, I think it''s a bit presumptuous to mock someone else''s reasons for choosing as they do (cash under the mattress). Peace of mind, in my estimation, far outweighs earning the monetary equivalent of a burrito in c/c miles, and if Ally (or someone else) values peace of mind more than earning a free gizmo, I think that should be respected.

 

[galeteia]

Ah-choo! Cat fur makes me sneeze...

While I found janine''s snarky comment about ''finance 101'' to be embarrassingly patronizing, I read her question about the post-breakup status of the house as ''curiosity'', but maybe that''s because I''m not a malicious person.

As for the credit debate, I personally feel that the people who don''t like having balances on their credit cards are the people best suited to having them. I go the paid-in-full (same end or end of month) route, and never use my card unless I have that amount sitting in my account. Or en route from my paycheck before the end of the month.

I find what people don''t seem to ''get'' about credit is that it is money that you DON''T HAVE. That money is NOT YOURS, you are borrowing money from the credit card company. It''s like the ''sales'' thinking: ''I got $30 off, so really it''s like $30 into my pocket'' rather than "Ouch, that wasn''t as bad as it could have been, but ouch!"

Credit cards are ''dangerous'' only to the people who have difficulty living within their means/controlling their spending/managing their finances. Sadly, in our instant-gratification society, that ends up being most people.

I like Oprah''s approach: stick it in a container of water and freeze it. If you really have cause to use it, you''ll have the day or two it takes to thaw it.

My credit card saved my behind when my wallet was stolen-- my card was the only thing NOT in my wallet, because I was leery of having it too ''accessible''. I had JUST activated it, and it ended up being my only piece of ID to get my other ID replaced. And yes, it does help to build credit, but not as fast as it helps to trash your rating if you goof.

 

[musey]

I know a guy that started putting $40 a month into an a high-interest savings account when he was 15. He wasn''t in a relationship then, but knew that when he wanted to propose he didn''t want to have to wait to save up the money for the ring before doing so. He''s now 22 and has over $5,000 in there. He''s still not engaged yet, but man, by the time he is he will have money for a VERY nice ring without having to flinch when he signs the check

I''ve never met another guy with the foresight to even start saving once their relationship got serious, so he''s one smart (and unique) guy.

 

[cutes814]

We pulled a loan to buy our rings. It wasn''t on a credit card, but it was still a loan from our credit union. The money he had saved up went towards a downpayment for the house we now live in, so we went this route. The loan was only 4% interest so it wasn''t too bad.


But on a side note, I am a plastic kinda girl.

I love to use my cc''s, but no worries. I have my debt under control.

I won''t use cash unless the place of business only asks for cash payment. Heehee, I have no idea why though. I guess cc''s are just more convenient for me. Plus I love the perks that come with it.

I have a cc that I ONLY use for gas since it gives me a 5% rebate, which is awesome! Then there''s my Amazon.com card which I use when I purchase something on Amazon since it gives me a 3.5% cash rebate that I can use at Amazon again. Then there''s my miles card, my Costco cash rebate card, and the list goes on.

I agree you have to be very responsible in order to keep track of your cc debt. I work in the finance industry and it''s sad how many people I see that use their cc''s like it''s free money. They will soon realize what a mistake it is. Some people prefer to use cash, like majority of my family. The only person that uses cc''s is my dad, everyone else seems to be against it.

Whatever makes them feel good. There''s no right or wrong way. But it does help to have a good credit history because when the times comes to establish a loan with a bank, the only way they can judge the person is through their credit report.

 

[chicagolawyer]

Looks like I''m in the minority, but my future fi paid $10k down and is charging the other $5k on a cc. The cc he will use is a no annual fee, 0% interest on new charges and balance tranfers for 12 months card which he got just for this occasion. He will easily pay this balance off w/in 6 months, without any change in lifestyle.

Neither of us ever carry a balance on a credit card, and the only debt between us at all is his $15k of college loans. I don''t agree with the majority here that you shouldn''t buy a ring unless you can pay in full right at the time you buy it. If you have no consumer debt and are responsible professionals with secure income, charging some amount is IMO not an unwise decision for a purchase as important and sometimes time-sensitive as an e-ring. If you can easily pay off the debt w/in a year and will be charged 0% or little interest, I don''t see why you let the extra cost hold you back from getting a ring you LOVE and will be fully happy with.

Just a post to make those who may have charged some of their e-ring feel a bit less of a minority.

 

[Blenheim]

My FI opened a credit line with 0% interest for the first 6 months to pay for my ring, and within 3 months he had paid it off in full and closed the account. I was actually a teensy bit shocked with I read a comment by Lady Kemma in another thread applauding Anchor and me for staying within our means -- I felt like FI and I were being pretty extravagent. We''re going to pay for wedding rings with cash. (Or CHECK!

)

In regards to the tangent, different people have different comfort levels and different definitions of good/bad debt. For example, I have a much more strict view of good debt than Janine does, but her views work for her. (For me, good debt consists of mortgages (usually) and student loans, I''m neutral about balances on credit cards that I''m able to pay off at the end of the month, and I feel like most other types of debt are "bad". This is for a lot of the reasons Lady Kemma mentioned.) While I have a credit card, I pay for everything with either cash or debit, as it makes me much more conscious of my spending. My cc is strictly for emergencies. FI''s more comfortable using his cc and paying it off in full every month. We currently have no debt.

Feel free to call me "old-fashioned"; I don''t think it''s an insult at all.


PS - Lady Kemma, I don''t think I''ve ever told you this, but I really admire you. Did you ever start another thread, by the way? I haven''t seen it.

 

[anacgarcia]

my FI put the ring on layaway for like 2 months, then paid 5k with his CC then the rest, like $1600 cash(debit) and he still has like a 2k balance in his CC but we''ve been paying also for stuff for our wedding, plus, as others have said, credit card gives him miles and cash back, so it''s ok for us... though i always pressure him to put at least half of his salary on the cc when he has a balance..