Melissa is about to get a $200 per month raise. she wants a new television and some furniture. she has $500 in her savings account and figures with her raise she will have the cash to make her purchases easily within a few months. she also has $1,000 in available credit remaining on her credit card and is thinking about using it to buy everything now rather than waiting until she has the money. what would you tell melissa?

There are two different options I would give her:

1) You can use your credit card now if you know that within the 30 days of purchasing the T.V. (or how ever many days until interest accrues if sooner) you will have enough money to properly pay your card off so that you aren't charged interest. Once you add interest, the T.V. becomes a much larger expense overtime due to paying the interest. Also, if it's a card that you get cash back for, you can 'make money' essential on your purchase because you'll get cash back.

2) Wait for the raise, what if the raise doesn't happen? What if something unexpected happens and you've used all your funds for a T.V. that isn't a necessity. There are so many reason to wait and pay cash for something. In this situation I probably wouldn't use all of my appropriated emergency funds for a T.V. and save the extra money from the raise.