What they really mean by monthly payments
When you see an ad or talk to a sales rep and they mention monthly payments, they’re really just getting you to buy. They know that you will be more likely to buy when the price looks lower. Chances are, you will probably be paying more money than if you were just paying cash.
Let’s talk about furniture for example. For easy math, you’re looking at a couch that costs $1000, but the monthly payment is only $100. You don’t have a thousand dollars laying around, but you can afford $100 a month! What they don’t tell you is the interest rate. That $1000 couch is really going to cost you $1100. Well, an extra $100 over 11 months doesn’t sound too bad. Then, you need a new TV for $200 a month, a TV stand for $50, and a car for $500, and a couple of other things. After all is said and done, your $100 debt payment has turned into $1000 a month, and it’s going to take you years to pay your debts off.
Now, these examples are just for easy math. The point is that as long as you are buying, they don’t care where you get the money from. And you will never run out of things to buy! The only one who is going to protect your financial life from debt is you. In order to do that, ask these 3 questions:
- Do I need it or do I want it?
- How much do I need to save to afford it?
- Is there a similar product that isn’t as expensive?
Most of the time, you will find out that you don’t need the things you want. Because of that, you can wait until you have enough saved to buy it. And you can probably find a more competitive product somewhere else if you do some digging!
By protecting yourself from the marketing of monthly payments, you will be more content with what you have and more satisfied with your financial life. Start asking these 3 questions, because no one else is going to ask them for you!
What do you think about monthly payments? Leave a comment or message me here.