Don't be seduced by low or no-interest rate loans
Friday, 24 August 2012 08:03

When deciding whether you need (or want) to make a purchase, don’t let a seductive payment plan sway you in your final decision.

Today an article written by Sunny Freeman in the Financial Post, with the headline “Canadians debt load the highest in eight-years” is worth thinking about. The following appears in this article:

“Consumers have taken advantage of ultra low interest rates since the 2008-9 recession to heap on low-cost debt.

With household debt at an all-time high above 150% of after-tax income, the Bank of Canada has declared it the number one domestic risk to the economy.”

One of the downsides of low interest rates, is that consumers think they are getting a GREAT bargain. The reality is that you are still paying for whatever you purchase, and if you are going in to debt to buy it, you will still be paying the monthly amount for a long time to come. If you are able to purchase it outright you will of course pay no interest and will have no worry about your future ability to pay for it.

As a general practice, every time you go to purchase something ask yourself:

-do I really need this?

-what will I be replacing when I purchase this?

-by purchasing this, what will I not be able to purchase?

-will I be as happy and excited about this purchase one year from now, especially if I’m still paying for it?

Do not be tempted to purchase on credit, simply because the low interest rate makes it look like a bargain.

Less debt equals more peace of mind. Less stuff equals more time, space and energy to live the life you truly want to lead.

Have a great weekend doing what makes you happy – connecting with friends and family and experiencing the many free things you can all do together to create a rich life.