But I’m sure some of us are wacky and amusingly liberal like @Glen_Barrington 's son-in-law. We’ll grow out of it and become solid citizens of the republic, secure and warm in our received ideas like @Glen_Barrington .
But not you of course. You’re a dangerously delusional academic. You’re hopelessly irredeemable.
Except, it doesn’t really pay down CC debt.
https://www.moneysavingexpert.com/credit-cards/minimum-repayments-credit-card
Making minimum payments just ensures you don’t end up even deeper in the mire. It doesn’t make things better.
There are arguments for building up an emergency fund if your debt is otherwise under control but as @Gamen says financially it is probably still more sensible to pay off the debts before worrying about an emergency fund.
Basically, your debt is an emergency.
First, it used to be that most people worked in the primary sector, agriculture, mining, and the such, but not anymore. Labor gets to be allocated to where it is most productive. Second, eliminating busboys does not eliminate the work done by them; it would now have to be done by other staff making a higher wage. Third, those people are the customers of businesses; laying them off reduces the market. If all companies do it, the economy would contract. In addition, there are sectors of the economy that claim that they cannot find enough workers. Perhaps they just need to improve the compensation packages that they offer.
I agree if it’s out of control. Frighteningly, though, there are some people that don’t understand they have to make the minimum payments and let the penalties as well as the interest build. That may be the kind of person that chart is addressing.
Another interpretation of the chart is that it’s about the allocation of budget for the scenario I described and doesn’t exclude additional funds applied toward (what is assumed to be a small CC balance) beyond the minimum while also building up a small emergency fund. Despite what we agree is the ideal precedence, there are different scenarios.
[at the moment I’m helping a friend who has a steady, well-paying job and a massive CC balance put together a sustainable financial plan. He asked about the emergency fund, probably after looking at a chart like that, and I told him “Nope, that’s not you. That’s for later.”]
Note that they break it down to a before and after.
First get a small beachhead ($1K or one months) emergency fund, then pay off debts, then increase emergency fund.
There is room for debate on this, and holding on to cash effectively borrowed on high interest cards while servicing debt is expensive, it buys one a bit of breathing room.
It’s sometimes hard for people who have their financial act together to realise how important this can be in the short term for people who don’t.
Agreed. I’ll stipulate that there may be scenarios where building up a fund while still having (manageable!) debt is the sensible choice although I can’t think of (m)any.
As for breathing room, I would say it perhaps buys the illusion of breathing room. Your net financial situation is in fact likely to be the same, if not slightly worse.
But the illusion may well be all that keeps you afloat, so…
Here’s the reverse of Red Robin’s just-so story, another one our smart conservative will believe:
“Look at us, we’re raising the minimum wage to $11 at our stores nationally. Nothing to do with some states making it $14 and our having to compete, nosiree! It’s because of corporate tax cuts!”
We are coming upon the days when the rich will finally not need the poor. What they had better realize before that happens is that the poor have never needed the rich, and have occasionally decided to do away with them.
And as the tide of baby boomers changes from putting money away for retirement to pulling money out in retirement. 401(k) investment vehicles will work even more poorly.
But,but,
Have to pay for those benefits somehow right?
Ha! There’s no way I could slot health care in like that. I just do the good ol’ American thing and skip that part so I can afford the rest.
Bullshit. Absolute Bullshit. Sorry, actually elephant shit, this is conservative spin pulled straight from the elephant’s arse.
companies like “red robin” have always cut every possible job they were able to, whenever they’ve been able to because it maximizes their profits. they aren’t keeping busboys because they have enough extra money to keep surplus employees around. no one is. that isn’t how businesses work.
every ceo interviewed who is getting major corporate tax break said they wouldn’t be creating new jobs with it. you saw the video right? because that is how business works.
This has been disproven every time it has been studied. Times of economic surplus and free time are all golden ages of innovation.
That sounds fantastic, but why the population increase? do you imagine that the only thing holding the population in check is that we are working too hard to have sex? maybe people are already having sex and either using birth control or not. Leisure sex would never cause a global population boom, whereas exploiting poorer countries economically has been shown to do exactly that. Turns out people reproduce less under leisure conditions.
Please take some time to put some information behind those opinions and assumptions and you’ll have much more interesting conversations with your liberal son.
exactly.
when it actually is the only thing that prevents that and has the opposite effect.
right? sorry we aren’t dumb enough to forget everything you’ve said and done up to this point that disproves this walmart. crazy how conservative cognitive bias will have them forgetting how walmart has always acted in order to believe this narrative is true. Walmart is one of the worst offenders in the US and many of their employees receive benefits low income.
Let’s be fair, now. When we had very little regulation full-time employment was the norm. I’d call 100+ hour work weeks full-time. Subsistence farming is definitely full-time.
haha, very true! 
and the yearly bonus was not dying due to workplace conditions.
regulations are the only thing holding us back from ideal worker conditions and universal prosperity. \s 
I have to keep an emergency fund, and have since I was in my early 20s. If I didn’t, there would have been many occasions when I would not have been able to afford food, rent/mortgage or transport to work.
I think it has to do with personality and behavior. It is known, that my life is something of a soap opera, so I need to budget for the unforseen.
Muchmoreimportantly, @doctorow, where did the photo come from? Please please please attribution/source? Tineye is no help, and I really really want to know more about it!
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