Blunt Money

You’ve all heard it:

Cars from $199 a month with no money down!
Payments marked clearly on the windshields!

It’s an incredibly common form of advertising. But when did monthly payments become more important than affordability? Probably about the same time prices for consumer goods went beyond what someone could easily afford with a single paycheck. It’s too easy to get sucked into the monthly payments trap. Before you know it, you can find yourself with a $199 a month car payment (on a pretty old car that requires you to keep full coverage insurance on it), $89 a month here, $100 a month there, and an empty bank account. All due to the ease of monthly payments.

But what do monthly payments really mean? In short, they mean that you can’t afford whatever it is right this instant. Unless you’re doing a zero percent plan because you’d rather be making money on your money, the usual reason to finance something is because you don’t have the money right now. The price of impatience is high: it’s not just the interest you’ll pay on whatever you finance, but all the things you can’t do with the money instead. And, fairly often, the things that people tend to finance are things that are guaranteed to wear out or become obsolete: cars, computers, big screen TVs & other electronics.

Your buying power goes further AND you get more of the latest and greatest when you save up first.

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