Cash and Carry
When you get right down to it-- if you can't pay cash for, you really can't afford it.
With the possible exception of a reasonable home mortgage or student loans for higher education (college or trade school), nothing should be bought on credit.
What about a car loan? A car is a depreciating asset-- not a good idea . . . by less car.
If you buy something on credit and don't pay the bill off completely at the end of the month, you will probably end up pay 2, 3, 5 times the price for your purchase. Was that cup of five dollar Starbucks Latte worth $10, $15, or $25?
So the next time you whip out that credit card ask yourself, "What am I really paying for this? Is it really worth it?"
Posted by DDFD at 10/28/2008 8:50 PM 
Categories: Frugality, Personal Finance, Credit, Simple Living, Personal Philosophy
Tags: Simple Living Personal Finance Credit Frugal Frugality Personal Philosophy
Categories: Frugality, Personal Finance, Credit, Simple Living, Personal Philosophy
Tags: Simple Living Personal Finance Credit Frugal Frugality Personal Philosophy
Perhaps this post should have been titled: Cash or Crash.
You've hit the nail on the head. A loan should be for something like a mortgage only. The whole idea of credit is a big "immediate gratification" trap, and so many of us have fallen into it.
In the span of two years I bought a new car and two new motorcycles. I paid cash for each. I also paid cash for all the heavy equipment around my place, and wouldn't dream of having a loan for anything.
Your point is well made, if you can't pay cash, you can't afford it. It's different if you're buying something for a business, because that will help you make money. However, we're talking personal here, and therefore credit purchases make money for someone else.
I like the idea that I don't "owe my soul to the company store" or anyone else. I like knowing that my stuff is really mine.
Our attitude is too much "want it now" and not enough of "get what you need" now and buy what you want later. As far back as the 1960s, we were known as a "buy it on credit" country. For the financially astute, it can work, but most of us are not capable of making good decisions in this area and so we suffer for it.
Clair
Reply to this
My business associate and I always get a kick out of some of the "kids" we work with that drive BMWs, but "kiss their moms good night"
This is the world we now live in . . . need I say more?
Reply to this