Although there is some debt that is considered to be beneficial when looking to build wealth, there are definitive items that are always a bad idea to finance. When you are strapped by debt and the interest that accompanies it, you are stealing away from building your own solid financial future. Here are three items that you should never go into debt for.
Financing furniture is never a good idea. While the low monthly payment may seem attractive at first glance, the deal becomes less promising when you take the time to figure out the total cost. In most cases, you will end up paying more for the furniture overall if you finance it. Financing furniture also makes it tempting to buy more than you need because of the lower upfront costs. Furniture also depreciates quickly, making a poor product to go into debt for.
The promise of a good night’s sleep can cause many consumers to spend way more than they need to on a mattress. Just because a mattress is expensive doesn’t mean it’s the best. Use review sites like Mattress Advisor to find mattresses within your budget that will still meet your needs. These sites will help you to compare options and find you a mattress that you can afford without having to go into debt over. It is possible to rest soundly on a new mattress without having to stay up at night worrying about how you will pay for it.
We have all been there. That need to just get away but not having the financial means to fund a vacation. Those sun-kissed photos will soon fade away once you return home and realize that you are staring at a mountain of debt. Vacations should be a reward for good financial habits. You will enjoy this time away from the day to day grind more if you know that it has already been paid for. Instead of charging up an expensive vacation, you should instead look to take a shorter or simpler trip. Or look into how you can use existing credit card rewards to book free or reduced travel.
Before deciding to finance something, it is imperative that you look at the total cost over the duration of the loan. When you see the big picture, you will likely notice that it is a better idea to pay for many items upfront.
If you feel like you are drowning in debt, you aren’t alone. Let us help you figure out how to get out.