The discussion critiques buy now, pay later schemes, highlighting how they cloud true spending clarity. It reveals the pitfalls of these plans that encourage unnecessary debt instead of mindful financial decisions. The host emphasizes the importance of conscious spending and having a clear budget. Rather than delaying payments, he advocates for giving dollars specific jobs and making informed purchase choices. The conversation ultimately champions clarity and intentionality in managing money.
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Avoid Buy Now, Pay Later
Avoid buy now, pay later schemes as they complicate spending and obscure true costs.
Always pay fully upfront to maintain clarity and control over your spending.
insights INSIGHT
Buy Now, Pay Later Obscures Value
Buy now, pay later splits a purchase into small, unclear installments, breaking your connection with the spending.
Focusing on installment numbers muffles the real value and joy of the item purchased.
insights INSIGHT
Spending Needs Clarity and Reflection
Spending should be an act of clarity and confidence, not confusion and burden.
Buy now, pay later creates a delayed reflection on spending, undermining control and learning from purchases.
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Jesse has ranted about credit cards and their pernicious way of separating you from your money, both literally and metaphorically -- obfuscating the way you spend and distancing your priorities from the point of sale. Today he warns against the newest form of this pernicious spending: buy now, pay later programs. It's like a credit card you don't have to sign up -- just purchase an item, and via an app like Klarna or Affirm, you can split up the cost of that item over several smaller installments.
Of course, buy now pay later programs encourage spending you don't have, rather than finding the money first in YNAB. But even if you have the money, splitting a purchase into multiple installments is just putting off the decision to purchase into the future. YNAB's goal is to help you be spendful, to spend with joy and clarity about what it is you want your money to do for you. Buying something the YNAB way means you've given your dollars a job and you have money set aside in a category meant to cover that purchase. Or, you don't have money in a category for that purchase, but you pull money from other categories to find the money -- making a clear decision to forego something else to buy this thing now.
Putting off the payment for an item is ultimately just robbing you of clarity, because the money doesn't flow out of the category when you purchase. It sits there, unused while you have the item but earmarked for a future date when the installment comes due. A buy now pay later purchase adds a layer of complexity to your spending plan, while lacking the conviction to say "do I really want this right now?"
The Jesse Mecham Show