Ok sorry if the answer to this is obvious:
If you want to get a new TV and you don't have the cash upfront and you have 2 choices:
1. Save the money for a year and buy the TV with cash.
2. Get the TV now on 12 months interest-free credit.
Is Option 2 considered to be debt ? I mean yes it's a monthly payment for 12 months and yes you OWE that money to the store.
But from a strictly personal financial budgetary point of view isn't Option 1 exactly the same as Option 2.
Both ways involve setting aside 1/12th of the Cost of the TV for 12 months. Only Option 2 allows you to get the TV now.
Now I would consider an interest-free loan for a big ticket item like a car to be debt. But for a relatively small ticket item like a TV ?? I'm not sure... The monthly payment wouldn't be a budget-breaker.
Emmm....Any opinions ?
Is this debt ?
December 6th, 2009 at 01:01 am
December 6th, 2009 at 02:02 am 1260064963
Does that matter? I think it does in a philosophical way. It means you have purchased a non-necessity item, a "want," that you couldn't actually afford. Regardless of the size or cost of that item or the interest rate on the loan, I think financing wants is a bad idea.
There are other options besides the 2 you list.
3. Buy a smaller TV that you can afford now.
4. Buy a used TV on craigslist or at a thrift shop or some other place.
5. Go without a TV until you can afford to pay cash for the one you want.
December 6th, 2009 at 04:20 am 1260073210
In my book debt is debt even if it is as zero %.
December 6th, 2009 at 06:22 am 1260080520
December 6th, 2009 at 12:50 pm 1260103851
I agree with you all... I think I was just playing Devil's Advocate with myself - isn't it strange the tricks the human mind can play on itself ! lol
Thanks for putting my back on the straight and narrow ! :-)
December 6th, 2009 at 03:31 pm 1260113507
When you borrow money you don't have, it's most certainly debt!! Then you are gambling if you can pay it off in time, etc.
December 6th, 2009 at 04:03 pm 1260115429
December 7th, 2009 at 02:48 am 1260154116
December 7th, 2009 at 03:32 am 1260156735
If your income was cut off completely, and you didn't make the necessary payment, would a collection agency call?
December 7th, 2009 at 02:49 pm 1260197364
No doubt that in 12 months, there will be a better TV, bigger TV, or the same TV but cheaper.
Either route you choose, you will have the money spent or saved in 12 months time. I suppose it's just a matter of how badly you need one right now.
I put off my own TV purchase for as long as possible before I finally bought it, and got a small one for a 33% savings.
Some day, I would like to get a real set (40" or bigger), but I'm waiting for that as well.
December 10th, 2009 at 12:17 pm 1260447447
I've currently got a 14" that I've now decided will do me just fine until I've the money saved up.
December 12th, 2009 at 12:15 am 1260576924
Jerry