Vendors offer “easy monthly payments” to lure buyers into purchases they should probably be avoiding. The problem is that these easy payments do not make your life easier; they are actually a recipe for a lifetime of debt.
Here is why:
You will pay more.
If you purchase a $20,000 car at 8% interest for 7 years, your “easy“ monthly payments will only be $311.72 compared to $626.73 for a three year note. Those lower payments sound tempting until you realize you are paying an extra $3,622 interest for that option. Remember: “easy” has a price tag.
You will take on more debt.
Once you start down the easy payment path, you will rationalize buying more stuff you shouldn’t be buying. Using the car loan example above, if you are paying $315 less per month, you will be tempted to go buy that furniture set. After all, it is “only” $300 a month.
You will stay in debt longer.
Lower payments mean a longer term, so when you agree to those low monthly payments, you are actually saying, “I plan to stay in debt a long, long time.”
You might get addicted.
Once you start agreeing to those low monthly payments, it will be easier and easier to take on more monthly payments. You are slowly being sucked into a vortex of debt which steals your joy, your energy and your hope.
“OK Joe, what am I supposed to do?” Great question. If you want different results, do the opposite of what you are doing now. Purge “easy monthly payment” from your vocabulary and attack your debt with sacrificially huge payments. After all, your goal is to get rid of the debt…not stretch it out. List those debts on a piece of paper, tape the paper to your fridge, draw a red line through each one as it disappears, and celebrate its demise.
Take a moment to imagine the freedom of having zero debt. Savor that feeling and go for it. You will never look back.
Readers: Have you ever fallen prey to easy monthly payments? If so, how did it happen? How is your debt battle going today?