Originally Posted by
StanSeven
I wouldn't advocate someone spending money they don't have. I'm assuming they have enough savings for an emergency day. What I'm saying is a $5000 bicycle or a nice vacation may be worth the added expense of interest. I'm also assuming people are realistic about their expectations - you know pretty accurately what your income tax refund is, if you're in sales you know what your commisions will be, if your company reimburses expenses you know what they come to, etc. Those things should have 90%+ probability as opposed to the 10% chance on the next promotion.
Actually, you are advocating spending money you don't have. It's called taking out a loan.
Back in 2008, I'm sure the millions of people who are unemployed today were thinking that they only had a 1% chance of being laid off from their job. You might as well justify your loan by saying "I'm going to win the lottery in 6 months, so no problem."
The "added expense of interest" only makes sense if you can use it to your advantage. If you have $10k in hand and finance a $10k bike at 0% interest, you can take that $10k and invest it in something with a 5% return and end up paying less than $10k for the bike. But it doesn't work if you don't already have that cash in hand. Paying interest just to "have it now" is not a valid justification for any luxury item.
Also, emergency savings are for just that - emergencies. Buying an expensive bike is not an emergency. You are talking about disposable/discretionary funds, not emergency funds.
Face it - your advice sucked. Admit it and move on.