So many money topics seem like common sense.  But if they really are, why aren’t more people doing smart things with money?  Take payments for example (take them, please!).  When buying stuff, big or small, why is it all about whether we can afford the payment?

On our biggest life purchase, our house, whether we can afford it or not comes down to what the monthly payment will be.  The monthly payment limits our purchase, not the purchase price.  Hmmm…so we usually overpay and stretch out the payments as long as possible.

Even for one of our next largest expenditures, our vehicle(s), it’s the same thing.  It’s not the purchase price that limits how much we spend, but the monthly payment.  Go figure.  So we buy more than we can afford and stretch the payments longer.

And it continues likewise on down the line to smaller things too like appliances, furniture, televisions, and other stuff we just have to have.  It’s not the purchase price that determines whether we’ll buy it, but ultimately the monthly payment.

What’s the problem here?  We’ve been cleverly marketed to and “trained” to think in terms of payments and not how much out-of-pocket it’s going to cost when we finally pay it off.

What’s the solution then?  CASH.  If you only used cash to make purchases, you would evaluate each purchase based on how much it cost (or hurt to dip into that pile).  With cash we would save so much money on items because:

·   We wouldn’t be paying interest
·   We would shop around more to get the best price
·   Fear of depleting our cash reserves would scare us off from even making some purchases to begin with

That’s why cash rocks.  You spend less (or not at all sometimes!).  And while you’re waiting to make a purchase, someone pays you to hold your money.  Cool.  So now let’s make “payment” a word from a foreign language.

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    Get out of debt, I dare ya!
    Boiled down money goo guru, Dan