Enjoy Now, Pay Later – The American Way
On of the reasons that our economy is in a precarious position is that it is composed mostly of spending. Specifically, it is created by the desire to consume ever greater amounts of newer and bigger stuff. And we don’t need most of that stuff.
The American Dream
Contrary to popular opinion, most people only spend about 30% of their money on things that they really need. People don’t need a cell phone. They don’t need new clothes or to go out to eat. They can survive just fine on cheap food like pasta or rice or vegetables.
The challenge is that we grow up thinking that if we can buy just one more thing then we will be happy. And the problem is exacerbated by easy financing. The cell phone is a perfect example. If you sign up for service, you can get a deal on the phone and start using it now.
This article on Yahoo explains how much it actually costs. I mentioned it before when the new iPhone came out and people were going crazy to get one. $100 per month seems like a small amount of money, but it is deceptive. The cost comes out to about $3,000 to use it for two years. Just think about how much less attractive the deal would be if you had to pay for it up front.
Am I saying that no one should have a cell phone? Absolutely not. I am only suggesting that maybe we can think about the real costs, and the effect the decision will have on our financial future. $150 per month could be invested in many ways, and pay huge benefits to us in the future
For people who have a job and pay a mortgage, $150 per month does not sound like a lot of money. Even $3,000 over the span of two years may not seem significant. But I think it may be time to rethink our finances. Some of the best and most exciting fresh ideas I have read recently came from Early Retirement Extreme. For starters, Jacob shows us how to retire in a few years. Why waste away in an office cubicle cell when there is so much more we can do?
Related posts:
- The $45,000 Cell Phone
- The Hidden Cost of Status
- The Rise–or Return–Of American Power
- Recession? What Recession? It’s Time to Buy a New iPhone!
- The True Cost of a Car
Related posts brought to you by Yet Another Related Posts Plugin.
I'm George Ulmer. Matt and I started this blog and launched the Online Investing AI business. Our goal is to develop the technology to allow anyone to retire after working for 10 years.
is one of my favorite financial books of all time. It's an allegory about a guy who has a terrible job, and how he overcomes challenges to achieve his dreams.
Ironically, I cancelled my landline and use a combination of a prepaid cell phone and VoIP.. and end up saving even more. VoIP is less than $100/year, provided you have internet access (free in my rent.) And it automatically forwards to my cell if I’m not on the internet at the time.
Hi,
What do you pay for VoIP? I use Skype which is free, and pay $3 per month to call to phones in the US.
I agree wholeheartedly on using prepaid phones! I will save $600.00 this year by not being on contract and with Net10 I have a super qwerty keyboard phone, I pay 10c per minute for my calls and only 3c each for my texts…I have national coverage with no roaming fees and I don’t get that ugly bill at the end of the month. Have a look at Net10′s special offers on http://www.net10laughoff.com and you’ll be glad you did!