Back in 2010 when my credit card was about to expire, I received a replacement in the mail that had to be activated before I could use it. I decided to not activate it, until the current balance (about $5K) was paid off. Had it paid off in 5-6 months. Then realizing that I had not missed having that credit card for the 5--6 months it took me to pay it off, I continued making those credit card payments to *myself*, by putting the payments in a savings account on which I had a check/debit card that could be used just like a credit card. In no time at all, I had several thousand dollars in that account, and cut up the credit card I had received, without ever activating it.
Now, I use the check/debit card the same way I use a credit card. The only difference is, I can't spend money if it's not in the account. The card will decline. Therefore, I can't spend money that I don't have. Additionally, instead of me paying 14-21% interest to the credit card issuer, the bank pays me interest on the money I don't spend. Yeah, it's less than 1% right now. But it's 1% I wouldn't have otherwise. This also makes me more conscious of what I buy. I question if I really need it, and if not, I don't buy it. It's a lot harder to spend money you already have, than it is to spend money before you get it. I like that.
Now that was 8 years ago. As it stands now, I refer to that savings account as my emergency account. I have built it up to a point now, where I have 5-6 months worth of recurring monthly living expenses in it. A few years ago having that emergency fund came in handy when my truck needed $1500 worth of repairs. Because of that account, I did not have a "financial crisis" or emergency. Instead, it was more like a financial inconvenience that did not impact my standard of living or way of life one single bit. WHen I went to pay for that new transmission, all I asked was "chip reader or swipe?" and I was on my way.
