I remember growing up, my mom would often put clothes on Layaway. She would find a special outfit and would put a deposit down and they would hold it for her. Then she would make small payments on it and once she paid for the entire, they would then give her the outfit. In fact my dad for Christmas would often just go and pay her layaway balances and give her those as her gifts!
But times have changed…While shopping on Target online the other day, I was purchasing $100 of household “supplies” and was offered the option to pay using Affirm instead of my debit card. With Affirm I can pay as little as $10/month for 12 months! Amazon also uses Affirm. There is also the option of AfterPay at many stores. AfterPay splits your bill into 4 easy payments. According to their website you pay over 6 weeks and there are no fees if you pay on time. They claim this will help you achieve “Financial Wellness”.
However, today we want everything immediately. It’s like Wimpy in the old Popeye cartoon, “I will gladly pay you Tuesday for a hamburger today”. And why should we wait? Between credit cards and now programs such as Affirm, AfterPay and others we don’t have to wait.
Yet, that is not how Financial Wellness actually works. These programs will have high rates if you miss a payment or are late. They are in it to make money, not to help you. Financial Wellness is creating a plan (a budget!) to be able to achieve your financial goals…regardless of how big. That goal may be a new purse or it may be purchasing a home or car. Being able to pay cash for items and not have debt follow you out the door is critical to achieving your financial goals. Don’t ask how much per month…ask how much.
If you need help creating a budget or learning to manage your finances, please contact me. I am here to help you take control of your financial life and reach your financial goals.