"Don't Pay for 14 months!! No Money Down!"
My kids can practically quote some of the TV commercials that have pitch men shouting slogans about how cheap everything is and that you should get it now. Especially the vehicle and furniture retailers. Those ads are on all the time. I have to turn down the volume just so I can think. Maybe that's a part of their advertising gimmick, making only their sales slogan stick in your head and erase all the other ads. Who knows? I think it might work on my kids. To them, getting the item is far more important than thinking of how you might pay for it. They would be quite happy to borrow money for every little thing that comes up on TV.
Debt itself is not a bad thing. In fact it can help us purchase things that just cost too much to realistically have saved for before we buy: ie. a house, vehicle, or education. So for those things most of us have to borrow money, and it's worth it to have a mortgage so we can have a house.. But there are things where borrowing money doesn't really make a lot of sense.
For instance, if you pay for a computer on credit card and make low monthly payments on your card, you will probably have to replace the computer before you have even paid it off. That's probably not a good thing to borrow for and pay back over 7 years.
The smart people at Wealth Web Gurus have a very good article about "Good Debt vs. Bad Debt." It describes how debt can help you and when it isn't good for you.
The Financial Post has an article about how easy it is to get into debt. The author, Gary Marr, thinks it is a little too easy to get into debt. "Debt Becomes Us."
Using debt wisely can help everyone over the course of their life. Use it unwisely and you'll end up with a whole lot of letters and phone calls, maybe even some guy named Vinnie knocking on your door at midnight, asking for the keys to the car. Nobody wants that.
My own advice about debt is: If you have to borrow for it, the value of the item should last longer than the loan.
Jerry
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