This piece is part of my 2016–2026 archive migration. Some original formatting, content, and external links may be missing, changed, or not be optimized.
Rethink voluntary debt
He said, “Usually, people finance because of the 0% financing, and through financing, those people are signing up for a minimum five-year contract.”
He also assumed that since the company was offering 0% financing, I would accept. After telling the first guy I would pay cash, the second guy asked again if I wanted to finance.
No. I don’t.
There have been many offers in my life that entailed 0% financing.
On paper, it makes sense to sign up for these offers instead of giving away your cash, but if you have the cash, why not pay for it outright?
In return, you:
Avoid a hard pull in your credit.
Avoid entering lengthy contracts.
Avoid the potential of late payments.
Avoid another annoying monthly bill.
Avoid accumulating unnecessary debt.
Rule of thumb: If you can afford to buy something in cash, and it doesn’t negatively impact your financial goals, do it to avoid taking on additional debt.
Avoid Voluntary Debt
Some of you have completely voluntary debt, which only adds fuel to the fire if you already have a collection of debt you’re trying to eradicate.
If you can afford to pay for something because you have the cash in the bank, then do so; you’ll increase your peace of mind and get addicted to doing this with your other purchases because avoiding unnecessary debt is freedom.
When Does 0% Financing Make Sense?
There are opportunities when 0% financing makes sense; maybe you need to do a balance transfer or have encountered a lucrative investment or business opportunity, but these are special cases.
Then there are other times when 0% financing doesn’t make sense at all.
A perfect example of this is phone companies.
Phone companies usually offer 0% financing, and most people sign up for it.
I remember having a random conversation with a lady as a kid, and she told me that she always pays for her phones outright.
That was a foreign concept to me at the time, but now it makes 100% sense.
If you have the cash, avoid debt when it’s pointless.
Some of you can afford a new phone outright, while others can’t.
If you can’t afford to pay for your phone upgrade in cash, reconsider the upgrade.
Hold off or buy a cheaper version whenever you need to finance something such as a tv or phone.
If you can afford to pay for your phone outright, buy the phone, and get in the practice of paying for stuff. We’ve got into the habit of financing everything because we can, but it doesn’t mean we should.
This content is for informational purposes only — not professional advice. Consult a qualified professional before making any major decisions.