Why Payments are Lame

Yes, I know I just used this picture last week

Financing is a great way to get what you want right now. Without waiting to save up anything at all! And making payments is pretty much a forced savings plan — only it comes after instead of before… Right?


Eh, not really at all.

You are thinking about getting a new motorcycle. You walk into the dealership and find something you really like. Your buddy has one and you want it bad. So you “sweet talk” the dealer into getting you the financing terms you want and come back home with a different bike.

And now you’re locked into payments until long after your temporary happyness fades.

I just don’t get the appeal. You give into your momentary desires and get something fancy. Then you grow tired of it. But you are still stuck paying for it years later.

Let’s try another example.

When we got wife’s wedding ring, we bought it with 24 monthly payments at zero percent interest. Being the money-savvy intellectuals we were, we thought we were brilliant. We had the money, but this way we would collect the interest while the money sat in savings for two years.

Ha! And do what — buy a soda with all of the profit?!

Instead, we agreed to do something useless and unnecessary TWENTY-FOUR TIMES.

Instead of ONE TIME.

A little over a year later, we realized how silly it all was. We quickly paid it off in full and never looked back. For the sake of a few pennies, we had wasted time and energy doing (and re-doing) a tedious, inconvenient task.

This is an example of hassle factor: valuing time and energy above other criteria such as price, status, or appeal.

And this is how we felt about wife’s wedding ring — something we still like!

Do you prefer making payments or paying in full? Why?