Mad Magazine once wrote, ” The only reason a great many American families don’t own an elephant is that they have never been offered an elephant for a dollar down and easy weekly payments.” This is a sad, yet accurate, assessment of our current culture. Many people never gain the skills to save. They buy and then work months or years EXTRA just so they can have what they wanted the second they wanted it. Interest is an ugly thing when you are paying it (which most Americans are), but it can be your best friend if you are receiving it.
Growing up, my younger brother did, in fact, want an elephant. My father never said, “No, you can’t have an elephant.” Instead, he said, “Wow, an elephant, that would be cool, let’s set up a savings goal so that one day you can get an elephant.” This is a healthy way to deal with money. In the end, you SAVE a bunch of money working, then buying, but you also appreciate what you have worked for because you already know the cost the minute you buy it. Suddenly the dollar has a very real value to you.
How can you be the person getting interest instead of paying it? Simple, put away your credit card, don’t sign the loan, refuse the payment system even if it is 0 down and no interest for two years. Why would I give you that advice? Simple, the company is about 90% sure you won’t have it paid off in two years. The company is NOT trying to save you money. Companies exist to make money, not lose it. So, if a company is going to take a gamble on letting you take their merchandise practically for free, it’s because they have high odds of making EVEN more money from you if they give you a deal to suck you in.
How can the company have such good success with such a risky deal on their part? Because people forget that they must pay it off in 2 years to keep from getting the high interest rate. Because people fall into hard times and aren’t making what they once were and no longer have the ability to pay it off on time. And possibly the biggest of all is that people don’t think. Their thought process is, ” I want it, it’s free, I’ll take it.” They never stop and think, “How many hours will I have to work to pay for this? What will the consequence be if something happens, and I don’t pay it off in time?” The company banks on this, and guess what, most of the time the company wins. And the few losses are so small in comparison to the gains that the company still makes off great with the deals they make you.
My father was always great at teaching us to save for what we want. He used to tell us unless you’re saving your money you’re just working for other people. Work for yourself instead of being a slave to your debt.
Jessi Canales
Focus Financial Group, LLC