The root of all evil?
Is money the root of all evil? I guess it depends on who you ask. If you ask the man with all the money he’ll sing you a happy tune and do a little dance. If you ask Mr. Bojangles on the other hand, you may still get the dance, but he’s just dancing for your spare change.
In recent weeks I have been preaching the power of discipline and the rewards of time, but I know my target audience doesn’t want to hear that. You want the Wii, iphone, the iPad. The Galaxy 3, and whatever the latest gadget is right now. And I can’t say that I blame you – I want them too. The problem with having everything now however is that you have to pay later, and pay dearly you will especially if you charge these things to your credit cards.
Let’s say you purchase the iPhone and Wii without any of the frills. That will run you about $1,000. That’s a lot of mucho dinero. Now let’s say you put them on your credit card earning 9.9% (many of my friends have cards around 13% or even higher at 18%). If you make minimum payments it will take you about 5 years to pay it off and it will be double the cost!
The interest you pay on the unpaid balance at rates of 13% or 18% really add up in a hurry and many people find that their initial payments will consist more of interest and less of actual principal. It is the principal that you want to repay as quickly as possible. Many people will make extra payments to reduce the interest cost that they are paying.
Waiting used to just apply to your wedding night, but not anymore with easy money available and many credit card companies trying to obtain your business. So try to wait to make that purchase until you have the cash saved up to pay for your new gadget. . Throw down the cold hard cash after you’ve saved up enough; you’ll save yourself hundreds of dollars in the process. Leave the credit card bills to the fools – you’ve got a different game plan.
How Hard is it to Resist Charging to Your Credit Card
While easy to say, it is very hard to do. First of all saving the money can be a challenge for many people. We all tend to spend our money almost as fast as we receive it. Learning to set aside some money for something we want to purchase is tough to do. In addition we should also be saving an emergency fund, but then who does that. Not enough people but that is the subject of another post.
Even more difficult for many people, most people will be envious of all of their friends who have gone out and purchased the latest gadget with whatever money or credit they have. While you are stuck with an older device, they are texting, surfing, emailing, gaming or whatever they do with their new devices. It can be pretty hard not to join the group with a new gadget.
We can find all kinds or reasons to justify spending the money. It might be that we need the latest iPhone for work. Or perhaps we are playing a game with people over the internet and the current device we have is just not fast enough to keep up with other gamers who are using the latest and fastest devices.
Maybe we take a lot of pictures and that high definition camera on the new iPhone would really enhance our pictures and impress all of our friends and family. Maybe we are tired of the small screen on the old phone and need to have a larger screen format. We love the apps in iTunes and they have all been upgraded for the latest devices and now our device is running really slow. Time to upgrade models. This is just a couple of examples that many people use to justify spending their money on new devices.
Is money the root of all evil? Well as hopefully this post has shown, it really depends on how you use it and how you manage your money. Everything will be much cheaper and less expensive if you avoid using credit cards and borrowing money. In the long run, over your life time you will be able to purchase more items that your friends will simply because you did not pay all of the interest that they are paying for their gadgets and instant purchases that we all like to make.