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If you have to finance something, you can't afford it. amirite?

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Openeyess avatar Money & Economics
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Alright, Dave Ramsey.

@Bf3247 Alright, Dave Ramsey.

Not necessarily wholesome, but it's the only award I had to give and I freaking cannot stand Dave Ramsey! The entire second half of my civics class in high school was personal finance, and all we did was watch his videos. Every. Single. Day. We even had a workbook. I did not enjoy a rich man telling me to buy everything with cash.

@lazar94 Not necessarily wholesome, but it's the only award I had to give and I freaking cannot stand Dave Ramsey! The...

Also can't stand the more recent:

Person experiencing generational poverty, disability, etc. -> "pull yourself up by your bootstraps!! Increase your income!!! I have no sympathy!"

Nurse fired for not getting a COVID vaccine -> "oh you poor baby. That's so unfair and I totally sympathize"

@lazar94 Not necessarily wholesome, but it's the only award I had to give and I freaking cannot stand Dave Ramsey! The...

Geez sounds like we had high school together. Mr. Smith hated Dave Ramsey too but he was forced by our board.

And now that I'm a plumber there a some things where you DO NOT have the money to pay for it. If your mainline sewer breaks it could be anywhere from $4000 to $65,000 (these are the numbers that I've personally seen) and a 25 year old who just got their first mortgage doesn't have $65k extra

dankXDs avatar dankXD Yeah You Are +1Reply

Like 85% of car purchases are financed. You're basically saying no one can afford to own a car.

There are a number of areas in the United States that do not have any type of public transportation, such as rural areas. If those folks can't finance a car then they don't have reliable transportation and they can't work.

Them Rent-a-stores are the worst. By the time you pay that $500 dollar tv, you gave them $1000.

I've seen a woman lose her couch, her tv, and her child's bed because everything was financed.

Apartlavishnesss avatar Apartlavishness Yeah You Are +4Reply

I agree, with the exception of a home, transportation and healthcare.

Similarly, renting furniture with the option to buy outright later is such a scam

Boknows12s avatar Boknows12 Yeah You Are +4Reply

I think you should change the title to "if you need to finance materialistic things and such, you can't afford it"

If I have 100k cash, I'm not going to spend 30k on a car unless I finance it. Be smart with your money.

dankXDs avatar dankXD Yeah You Are +3Reply
@dankXD I think you should change the title to "if you need to finance materialistic things and such, you can't afford it"...

Seriously, financing is usually money smart.

We make, combined, around 230k/yr. We still finance most things if the interest rate makes sense. Why not let my money make money?

Mrtechnohawks avatar Mrtechnohawk Yeah You Are 0Reply

Opportunity cost and inflation will disagree

I much rather finance my house for 30 years at 3% (got lucky few years ago), while real inflation is probably around 15%

I'm a plumber and we have people in lower income areas finance water heaters when they go out, or even some sewer lines, those are pretty important imo

Kasies avatar Kasie Yeah You Are +3Reply

Such a revolutionary opinion:

"If you have to borrow money to buy something, you actually don't have enough money to pay for it yourself"

ambitiouscorners avatar ambitiouscorner Yeah You Are +3Reply

I financed some repairs on my house at 0% as long as I pay off the balance within 18 months. Am I making a bad choice?

You are right that lots of people make the mistake because financing something is really easy but it's more about thinking through your financial choices rather than just paying cash for everything.

Op is saving up to buy a house. He'll own it outright. But at age 92.

synthsexuals avatar synthsexual Yeah You Are +2Reply

Your unpopular opinion is just a dumb opinion

This isn't an unpopular opinion. This is an uneducated opinion

Tell me you're bad with money without telling me you're bad with money.

Tanmoykayesens avatar Tanmoykayesen Yeah You Are +2Reply

Damn I guess I really shouldn't have gone to college and gotten student loans for a comp sci degree that will pay itself off in like one year max.

Dang also I shouldn't have gotten financed a car that let me get to my cs job and that I can pay off in like a couple of months max.

Great advice!

This is indeed unpopular, and clearly misinformed.

Nickyikkys avatar Nickyikky Yeah You Are +2Reply

Ya but why dump 15 grand at once when you can just knock it down over time. That's just a bad decision.

My first car was on 0% finance over 5 years. There is literally no benefit to paying it off in one go

Thatoneduderyans avatar Thatoneduderyan Yeah You Are +2Reply

Unpopular opinion: people who don't understand finance shouldn't be making takes like this

Professor-kaosss avatar Professor-kaoss Yeah You Are +2Reply

You're right! I'll just get rid of my car since i had to finance it. Oops, looks like i can't get to my job anymore, oh well, at least I'm being fiscally responsible! Oh i forgot i need money to pay rent. Well i guess I'll be homeless but at least I'm being responsible with my money by not financing anything!

One has to factor in opportunity costs though. If I don't finance a house I pay rent instead of a mortage. If I don't finance a car maybe I can't start my business etc.

Openeyess avatar Openeyes Yeah You Are +1Reply
@Openeyes One has to factor in opportunity costs though. If I don't finance a house I pay rent instead of a mortage. If I...

There's two types of people that borrow a lot of money - incredibly poor people and incredibly rich people. The borrowing part isn't the problem - it's what you're using it for.

@Openeyes One has to factor in opportunity costs though. If I don't finance a house I pay rent instead of a mortage. If I...

Not to mention that at most times you can get a better rate on your money in the market than your interest rate on your house (this however does not apply right now). Why should I spend 500k on a house up front when I can put down 150k up front at 4% APR and invest the other 350k in an index fund that averages 10% a year?

@Openeyes One has to factor in opportunity costs though. If I don't finance a house I pay rent instead of a mortage. If I...

If you don't finance a car, you may have to rent one to get around. Imagine paying $700 a month or more to Enterprise while trying to save up for a down-payment. Not everyone can hop on a bus or train.

Nickyikkys avatar Nickyikky Yeah You Are +5Reply
@Nickyikky No way in hell anybody's renting a car for $700 a month. That's a week, maybe two

Leasing is cheap, actually renting is not. Last time I rented a car for 1 day it was over $200

Mcgee0s avatar Mcgee0 Yeah You Are +3Reply
@bigdaddy69-4life If you don't finance a car, you may have to rent one to get around. Imagine paying $700 a month or more to...

Literally could not use public transit at all in any of the places I've lived in my 40 years except one, which was only for like a year. Everywhere else required a car. When i did decide to finance a vehicle it's because the cars i could afford to buy outright kept breaking and i couldn't afford those either.

@Huemaninstrument Literally could not use public transit at all in any of the places I've lived in my 40 years except one, which was...

...And most of the cities in North America where public transit is a viable option are on the list of "most expensive places to live".

@Huemaninstrument Literally could not use public transit at all in any of the places I've lived in my 40 years except one, which was...

Exactly. Anything reliable will probably require financing. Ive been on the clunker rodeo, and at times old cars are not only unreliable but very dangerous. Broken cars mean time off work plus bills from the mechanic.

@Eastern-Spot2023 Exactly. Anything reliable will probably require financing. Ive been on the clunker rodeo, and at times old cars...

As someone who drives a 22 year old truck, I'd recommend anyone who relies on a beater to get two of them so they have reliable transportation when one of them is up on jack stands.

@bigdaddy69-4life If you don't finance a car, you may have to rent one to get around. Imagine paying $700 a month or more to...

Lol just rented a car from them. Try $700 a week, and that's with my buddy hooking me up with a manager discount. You'd be paying 3000-4000 a month minimum if you rented.

Lol ironically, this is the definition of poor people thinking.

@Balkany4Ever Lol ironically, this is the definition of poor people thinking.

100%

Rich people know the ins and outs of how to finance. Financing, when used properly, frees up other monies for useful investing. And if wisely invested, the return is greater than the finance charges.

Business classes should be mandatory from freshman through senior year in high school.

@Crazymotherfuker 100% Rich people know the ins and outs of how to finance. Financing, when used properly, frees up other monies...

Yes all those ''here's what you should do if you actually had money" courses will be great

Nickyikkys avatar Nickyikky Yeah You Are +2Reply
@Crazymotherfuker 100% Rich people know the ins and outs of how to finance. Financing, when used properly, frees up other monies...

Forget about knowing all the ins and outs, rich people can also get low interest rates. Financing things is a lot harder to justify if any loan is 7+% APR

@Balkany4Ever Lol ironically, this is the definition of poor people thinking.

OP is laughing while they're lying down on their mattress stuffed with cash

@JoshByer2 OP is laughing while they're lying down on their mattress stuffed with cash

OP is laughing at the people paying a mortgage while they pay rent.

@Eastern-Spot2023 OP is laughing at the people paying a mortgage while they pay rent.

Don't you understand that if you RENT then the LANDLORD has to do all of the maintenance. You have sooooo much more time to use for better things. If you buy a house you're stuck there, if you rent you have way more freedom to move wherever you want. When you really think about it, home ownership is so much more complicated than renting. Why mess around with a mortgage when you can just write a rent check every month? /s

dankXDs avatar dankXD Yeah You Are +1Reply
@Apartlavishness That /s was so necessary because I've seen all of this said unironically.

I mean if ur rent is significantly below market value then it's reasonable to think, but most people aren't significantly below market value.

@Apartlavishness That /s was so necessary because I've seen all of this said unironically.

I remember hearing some of those lines from a guy in his 30s who also said he didn't work overtime because it gets to a point where you actually make less money because you move into a higher tax bracket….even at 16 I was like "dude, that's not how tax brackets work at all" πŸ˜‚ Unsurprisingly, he and his wife ended up going bankrupt a few years after that.

@Apartlavishness That /s was so necessary because I've seen all of this said unironically.

Bro I was ready to start typing up a whole paragraph and then saw the /s πŸ˜‚πŸ˜‚ definitely seen that said unironically before

@contextrip Bro I was ready to start typing up a whole paragraph and then saw the /s πŸ˜‚πŸ˜‚ definitely seen that said...

Gotcha πŸ˜ŽπŸ˜‚ I definitely have too, renting is totally fine, but the cope is strong with a lot of people.

Shusszs avatar Shussz Yeah You Are +2Reply
@dankXD Don't you understand that if you RENT then the LANDLORD has to do all of the maintenance. You have sooooo much more...

Wait genuine question, does buying vs renting matter if you don't plan to have kids? I understand buying a house so it becomes an asset & you can pass it to your kids, but what if I don't have anyone I'd plan to pass down my money/assets?

@Huemaninstrument Wait genuine question, does buying vs renting matter if you don't plan to have kids? I understand buying a house so...

You will want to retire some day. You can have a much more comfortable retirement if you're not making mortgage payments. Having to just pay property tax and home owners insurance will help your money last a lot longer.

That's why I'm hoping to have my forever home by 35 so I can have it paid off right as I retire.

@Balkany4Ever Lol ironically, this is the definition of poor people thinking.

Yep there are definitely things that are acceptable to finance. You have to do a cost benefit analysis and make sure it is worth taking away future earnings, but my education furthered my paycheck, my car gets me to work so I can have a pay check, my house is less than any apartment payment wise near me and I am gaining equity, but many wants are not worth financing sure…

@88080808088 Yep there are definitely things that are acceptable to finance. You have to do a cost benefit analysis and make...

House and car and education are three things that are acceptable to finance. You just have to be judicious about how much you finance.

@Alixkast Ideally, you shouldn't have to finance health costs.

Well, health stuff is not always "life or death" situation. For example, the dental problems – they can cost a fortune, but you should totally deal with them ASAP.

@Dairyqueenemployee I would've added health issues. You know, it's the most important one.

I hate that we're basically stating a position on: "Is it acceptable to finance not-dying?"

@freq432 House and car and education are three things that are acceptable to finance. You just have to be judicious about...

There's a gray area between what you need vs what you don't need in premium vs standard for education, housing, and cars.

@88080808088 Yep there are definitely things that are acceptable to finance. You have to do a cost benefit analysis and make...

Also sometimes I pay in four something that I can afford in full and will continue to be able to afford, just to not have to do it all at once. It frees up my money.

@Balkany4Ever Lol ironically, this is the definition of poor people thinking.

Kind of.

The issue here is not the financing. The issue is buying more than you should because the financing enables it.

Rich people take the financing option because it always makes sense to take cheap financing when it's available.

Poor people take financing because they couldn't afford it otherwise. And end up buying more than they probably "should", assuming their goal would theoretically be to increase their wealth in the future.

Paying cash is really good advice for poor-ish people because it keeps them from building up too much debt, and reduces the likelihood they will buy more than they should.

@Balkany4Ever Lol ironically, this is the definition of poor people thinking.

Yeah man, debt is a tool. Being financially hindered by CC debt is a problem. But ignoring the many uses of debt and labeling it as "bad" is reductive

KilljoyXs avatar KilljoyX Yeah You Are 0Reply

Cars? We're supposed to buy cars outright? Guess I'm walking to my job 35 miles away.

Iapetus-11s avatar Iapetus-11 Yeah You Are +1Reply
@Iapetus-11 Cars? We're supposed to buy cars outright? Guess I'm walking to my job 35 miles away.

I was thinking this. How are you suppose to save money to buy a car if you need a car to get to work.

So basically unless you have half a million in cash, you shouldn't have a house? Is that what you're telling us?

Prettydottys avatar Prettydotty Yeah You Are +1Reply
@stevnev88 I think a house is significantly different that what OP has listed.

Why?

The title just says "finance something". A house is a something, and a mortgage is a type of financing.

Boknows12s avatar Boknows12 Yeah You Are +3Reply

Rip home owners I guess

Well then. Here are some things 90 per cent of the population can't afford.

Cars, houses, education, business startups, medical care...

What a seriously idiotic take.

No….

Sometimes people finance to get tax breaks.

Who the hell has an extra $20k sitting around for even a used car?

I don't disagree on everything except a house.

KilljoyXs avatar KilljoyX Yeah You Are +1Reply

So if you can't afford to pay cash for house and need a mortgage you can't afford it? Unless you can pay cash for a car, you can't afford it? And yeah, if you get 0% financing, still can't afford it?

Pretty dumb take tbh.

I finance my car at 3.15%, the cash I would have spent on the car is earning at the moment like 9.25%.

Debt is strategic if done properly.

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