Over the past several weeks I’ve been receiving a number of notices from retailers (furniture stores, car lots, etc.) offering me “no payments for 90 days” promotions. I used to jump at these opportunities, but now I shrug and toss them in the trash.
What those notices often fail to point out, except in the 4-point italicized font at the bottom of the back of the postcard, is that during the 90 days of no payments they are still accruing interest on your balance. You still owe a debt, and it gets more expensive every day.
This is like telling an overweight person, “Wait 90 days to start that diet, and just eat whatever you want to until then.” At some point, the dieter and the borrower, have to face their battle and start working things off. The problem is, in three months, they now have a bigger problem.
Most of these types of “creative financing” arrangements are offered to consumers who refuse to face one single reality – they can’t afford to buy whatever is being offered. That’s it; you can’t afford it. If you don’t have the cash to pay for something outright, or when the bill comes due at the end of the month, you simply cannot afford to buy it.
Alternatives to “No Payment for 90 Days” Offers
Save Money. Open a savings account if you don’t already have one and get started saving towards the item you would like to purchase. In 90 days, you will either have enough money saved, or decide the item isn’t worth three months of your savings.
Be Content. Let’s face it, most “No Payment for 90 Days” offers are made on things we can probably live without – new cars, new furniture, new jewelry, big screen televisions, etc. My grocery store doesn’t offer 90 days same as cash on meats and produce. The gas station will not let me start an interest-free tab. So, chances are, whatever it is you are thinking of buying can probably wait.
You can keep sitting on your old sofa (or buy a yard sale sofa, like we did).
If your car dies, buy a cheap one and save up the money to buy a more expensive one with cash down the road.
Of course, it is much easier to walk into a showroom and pick out something brand new with a big price tag and a financing agreement to go with it. But remember, by delaying the inevitable bill all you are doing is tying up future earnings in debt payments.
Who knows what your life might be like 90 days from now? Could you survive getting laid off? What if you get sick, or a loved one falls ill? What if your car dies the week after your big screen television arrives. Trust me; these things happen.
I’m not advocating you sit around and consider the worst case scenario, but I am advocating a practical approach to managing your finances and acquiring new stuff. If the aforementioned things do happen, you’ll be better off minus a bunch of debt payments on things you don’t own.
Pride of Ownership Goes Up When You Actually Own It
Here lately, I’ve taken a hard look at the things I own. Do they bring me joy? Do they add quality to my life? I find that the things that were acquired with my own money, not with debt or a gimmicky financing arrangement, often bring me the greatest joy. Why? Because I don’t resent them, like I used to resent a financed Silverado, and a bedroom suite purchased on a credit card.
When I make the conscious decision to part ways with my money in exchange for some item, I want to own it as soon as I leave the store. This way I can enjoy it for its intended purpose without worrying over how much it cost, or how I will afford the monthly payments.
When it somes to stuff, own it or get rid of it. That’s my only two options from here on out.