The Most Important Question To Ask BEFORE You Apply For Credit
So there’s a new videocamera that you absolutely must have, or you need a new work wardrobe, or your old TV just isn’t cutting it any more, or your family hasn’t been on vacation in YEARS and you are looking longingly at cruise manuals.
Here’s the question that you need to ask yourself before you go into debt to finance your purchase: What’s going to be different about my finances a year from now? Or even six months from now?
Here’s why you need to ask yourself that question:
Whatever you are paying to finance, is going to be second-hand, or consumed and forgotten, as soon as you pay for it. Next year you will have a used video camera, last year’s model of a big screen TV set, or last season’s designer clothing which are now worn and secondhand. And you will still be paying for it every month, WITH interest.
And guess what? Now you need a NEW toy, and new clothes, and another vacation, and another TV.
But odds are very good that you still are earning the same salary and still have the same basic expenses. Or in this economy, you may be earning LESS and spending MORE – gas prices go up, food prices go up, companies go out of business, new jobs pay less, Christmas bonuses don’t come through and pay cuts are required…
So all that you achieve when you put something on credit is to dig yourself deeper into a financial hole.
Are you going to take on a second job so that you can quickly pay off that debt? Do you have a big chunk of cash, or a bonus from work, coming in, that you DEFINITELY can count on to pay off that debt?
If your financial situation is going to be the same in six months or a year – do NOT take on more debt, because it becomes a neverending cycle with you giving up future savings and security to support the owners of credit financing companies, not yourself and your family.