Is Buy Now Pay Later affecting our money mindset? It’s a new booming industry that’s gained a lot of popularity for doing just what the name implies. Helping you buy what you want now and pay it off later in installments. With no interest charges, no credit cards, and a smaller upfront cost to purchase your goods. No wonder it’s a booming industry. Without a doubt, people are seeing the benefit of using services like this to purchase large and even small ticketed items nowadays. But how are these services harming our money mindset in the long run?
Why is it so Dreadfully Paying for it Later?
Storytime! When I was paying off my student loans, I felt financially held back and stressed out. I couldn’t clearly understand how this debt was controlling how I felt about my financial future. I already got the degree and the career that I was promised. But why was paying off the loan so dreadful? It felt like it was going to take my husband and I forever to pay off our loans and would limit our ability to buy a home or start a family.
During our debt-free journey, I realized that I felt like this in a lot and in other areas of my life, not just my student loans. I was naturally devaluing purchases and experiences once I already accomplished or enjoyed them. But once it was time to pay off the experience or the item, I was feeling the exact same way. Dreadful!
Are we Buy Now and Pay for it Never?
When it comes to debt, we say that we want to leverage it and use it to better our situation. But Buy Now Pay Later is still debt no matter how you put it. The truth that a lot of people are starting to see is that it can be just as harmful of debt as credit cards. With the average American already on a tight budget, and feeling every financial strain when it’s time to pay off the debt. Now with more and more data is coming out of people defaulting on their Buy Now Pay Later micro-loans. This is very bad news for this booming industry and the future of credit. But what does this mean for our money mindset? Are we getting accustomed to getting what we want now and never paying for it later?
Don’t end up Broke Now, Broke Later
“What you think you can afford today, might not be what you can afford tomorrow.”
For a lot of people, living paycheck-to-paycheck makes affording anything additional complicated. Like Paula Pant quotes, “when we decide to say yes to something, this could also mean saying no to another”. If Buy Now Pay Later is affecting our ability to save or invest in ourselves and our future, How is it helping us get what we truly want?
A lot of times we focus on the best-case scenario of being able to afford $100 here and $100 there. Without assessing worst-case scenarios of what would happen if we can’t maintain all of these $100 payments. What if your family needs to borrow money, if you have an emergency, or if you need something else down the road? Do you have a plan A, B, and C or are you just hoping that nothing comes up in the next few months to push you off the bandwagon? We tend to forget that small leaks can sink a large ship. Especially if you don’t have the financial wiggle room, to begin with. This leads me to an uncomfortable reality that inflation is making true every day. What you think you can afford today, might not be what you can afford tomorrow. This truth can be a new red flag for our generation’s view of money, their money mindset, and financial solutions.