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.
Many of you have been lying to yourselves for years
A financial concept dominates our world called financing; this has created zillions of financial opportunities for people, and it’s beneficial – especially in the business world or in financial emergencies.
But.
Financing has also created havoc in people’s finances. Not only do some live by financing, but this is also all they will ever be able to afford because they never save enough money to make their purchases with actual cash.
But Monthly Payments Are Affordable
Indeed they are. Monthly payments have saved the day and have made it easier to afford things that used to be out of range.
But can you afford the total balance or just the monthly payment?
That’s the difference.
If you struggle to pay for things with cash, avoid a few things:
Car notes
Credit cards
Personal loans
Credit Cards
A debit card is your best friend until you learn how to function without debt.
Someone with maxed-out credit cards asked if they should open a new credit card, and my recommendation was a hard “no.”
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If you’re struggling to live without debt, adding new opportunities (i.e., a new credit card) to create debt will likely exasperate your less prudent habits.
Car Notes
Cheaper cars are also your best friend until you have income saved in the bank that is more than the worth of your car.
You don’t have to get the fanciest car on the market or the most upgraded version of your preferred car.
“Basic” is still good, and sometimes basic is better for you, your finances, your budget, your financial future, your family, and your peace of mind.
Personal Loans
A primary reason people get personal loans outside of business is that they don’t have any savings.
Think about your last emergency. Did you have savings to cover it, or did you dip into a credit card or acquire a personal loan?
Many pick the latter options because, as many who study finance know, most people can’t cover a $500 emergency expense.
You can avoid personal loans with more financial preparation.
Making Things Work
I will never forget observing someone who “made things work financially” so they could obtain a new car.
Not only did they not make a down payment, but they also didn’t have any savings, they had a lot of credit card debt, and they had student loans.
The worst part is that they make great money but continue making poor financial decisions.
“My Car Is Cooler Than Yours”
If you have to make things work, walk away.
This content is for informational purposes only — not professional advice. Consult a qualified professional before making any major decisions.