by This world is a have it now type of world. Whether it is a 5 minute ab workout or a 7-minute video that promises a drop-shipping business that can make you millions. Each ad is focused on getting you started and the sooner the better. The world rarely wants you to wait…they want you to take action and they want you to take action now!
We are big believers in taking action. Action can help you achieve true financial freedom faster. The daily marketing barrage isn’t pitching financial wellness, it is usually pitching an expense. Take, for example, a recent ad that came through our feed:
On the surface this seems like a great offer. A $349 driver for $37.42 for 12 months. It’s being offered to you at 0% APR. See how the above works at https://club14golf.com/pages/how-it-works.
For many that would consider themselves budget conscious this is a great alternative. Using a credit card could be extremely expensive. You would be wasting money on rates that can range from 8%-21%+.
Making the analogy to a credit card purchase would be a pretty fair deal. We want you to look beyond the deal. Our goal is to get you focused on the best possible financial future. In order to do this you can’t look at an offer only in a convenient light.
Before you dive in on the latest of payment plans (Klarna, Affirm, etc.) we invite you to consider asking yourself the following questions:
- Do I really “need” this item today?
- Is this something I have been wanting for more than 24 hours?
- Have I tried to save for this item in the past and not achieved that goal?
- Is the amount of $X ($37.42 in the above) currently available in my budget?
- Have I set up any auto-recurring investments of at least $X (i.e. $37.42) for the defined payment period?
Your likely initial reaction is “why are the twins being so hard on me?”. After all these payment solution providers are getting their costs covered by the vendor which gives you the benefit of a 0% APR purchase….so why not do it?
You might still decide to make the purchase because it’s a cost effective acquisition. The challenge really is to answer each of the above questions. We want you to answer them truthfully and honestly. Your future self is counting on it.
The products being offered with payments generally aren’t critical needs, they are “nice to have” items such as clothes, sports equipment, etc. From our POV people take the payments because the overall cost being spread out over payments makes it incredibly affordable.
The challenge to consider though is “how many payments have I committed to?” This is perhaps the main reason to avoid taking the free payment option. If you keep adding payments that are debited from your checking account then pretty soon you could be in a position where your payments are $300+.
Even if they are all at 0% interest does that $X fit into your existing budget? If it does fit into your existing budget what are you doing with those funds now?
With payment solution firms being incorporated into many different online stores we would challenge you to save on your own for an item instead of taking the payment option. Saving up for an item will challenge your mindset to see if you really still want the device 12+ months later and if you don’t then you can put that extra savings into the Stock Market or in your Mutual Fund(s).
Twins Rules for Financial Success
As with all of our content here we want to encourage you to follow three core rules :
- Have an Emergency Fund/Squirrel Funds
- Invest for the Long Term
- Invest Automatically & Consistently
