Comments on: What Would You Do?

By: Andrew Stevens

Andrew Stevens — Tue, 23 Oct 2007 05:42:13 +0000

I’m about six hours after your deadline, but option 3 is a no-brainer, really.

By: mapgirl

mapgirl — Mon, 22 Oct 2007 11:53:31 +0000

Thanks everyone for the input. Specific items:

1. Hand knitting is actually quite expensive. For $95, she’d get a fairly bland scarf. Going rate is to charge 50 cents a yard, therefore most scarves would actually cost about $200.00+.

2. No, I cannot squeeze out $500 out of the next paycheck, because that is the mortgage check.

3. The cash crunch is going to last till January. By that time, the dental bill will be done. But I will be putting money back into my 401k. Ironically, the CD expires in January. *sigh*

By: moom

moom — Mon, 22 Oct 2007 05:21:17 +0000

As the doctor isn’t charging interest it doesn’t make sense to pay interest to pay the bill off. I’d break the CD and then withdraw the extra $100 or so from an ATM using the credit card so your friend has the money as soon as possible.

By: Armchair Fiduciary

Armchair Fiduciary — Mon, 22 Oct 2007 03:49:38 +0000

I’d go with option #3 as well. Better not to tax your friendship and heap up some additional debt. Just blow out the CD and pay your friend back. Once you get out of this bind be sure to save up a little larger buffer if you can.

By: Chief Family Officer

Chief Family Officer — Mon, 22 Oct 2007 03:33:11 +0000

I don’t like the idea of more debt, so I would bite the bullet on the penalty and redeem the CD. But I’m wondering – after you do this, how long is the cash crunch going to last? If it’s going to make things incredibly uncomfortable, but you could pay off the new debt by, say, February or March at the latest, I might think about it.

By: Sean

Sean — Mon, 22 Oct 2007 02:52:32 +0000

I hope your teeth are doing well!

Also, I vote option 3 all the way. Mrs Micah hit the nail on the head: missing out on 5.2% is better than paying 8 or 10%.

I realize you need a quick turnaround, but you might want to see if you qualify for a 0%-balance-transfer-for-1-year credit card from citibank – they let you write a check to yourself as a “transfer” so you could just pay off your friend and have 0% interest for a year. Good luck!

By: Sjean

Sjean — Mon, 22 Oct 2007 02:32:01 +0000

I would also choose number 3. While the dentist bill I can understand, it is surprising to me that you can’t wiggle 500 out of your next paycheck. But I’m young and mortgage-lees, so perhaps I’m naive.

By: Single Ma

Single Ma — Mon, 22 Oct 2007 01:33:34 +0000

I’d choose option #3. If by chance there’s an option #4 (more flexible or extended payment terms with either party), I’d pay my friend first or give the laptop back until I could afford it.

By: Mrs. Micah

Mrs. Micah — Mon, 22 Oct 2007 01:07:25 +0000

I’d go with option #3 as well. The interest it’s earning isn’t more than the interest you’d have to pay back!

By: Sense

Sense — Mon, 22 Oct 2007 00:30:53 +0000

I agree. I haven’t been keeping up lately, but the $3000 dentist bill sounds like something that could be considered as an ‘emergency.’ You obviously didn’t have time to prepare for an expense like that.

Why pay interest on your doc bill and money that you owe your friend when you don’t have to? This is exactly why you’ve been saving.

By: Brian A

Brian A — Mon, 22 Oct 2007 00:07:05 +0000

I believe your instincts are correct. Considering that the first two options only put you more in debt (charging the additional interest rates), I think it is best to avoid them; especially if they make you uncomfortable in any way.

Perhaps in lieu of the $500 (or $95 if you go option #3), you could knit your friend something. Of course for that kind of money, that is one really loooooooooong scarf. The idea, however, is to see if you have something of value you can trade with your friend since they are more likely to accept such trades than a bank ever would.

If you do choose option #1 or #2, I would not borrow the additional money to pay off your dentist bill too. If I read you correctly, you are already on a payment plan with your dentist that charges no interest – why change that to a plan that does?

Good luck!