You’re an idiot if you don’t. What’s going to happen if you lose your job tomorrow? Will you be able to pay all of your bills if that happens? What if some major unexpected expense hits? Can you afford to pay for it?
If not, then it is time you changed your life.
Credit is for fools. The only thing you should even consider buying on credit is a house and that’s only if you can pay it off within a reasonable amount of time. What’s the point in making payments for something that won’t be paid off until you die? It’s not like you’ll be able to enjoy it when you’re gone. Seriously, by the time you bite the dust I doubt that your kids will even want the place. They’ll just fight over the money once they sell it at auction.
The same goes for your stuff. No one wants your used crap, so pay cash for what you personally enjoy and consider the money a loss. Don’t worry about investing for your heirs or if it might be worth money “someday.” Chances are that it won’t. Not in your lifetime anyway.
When you buy things on credit, you not only pay extra for the privilege, you are gambling with your future. You are gambling that you’ll still make enough to afford the payments X months or years down the road.
In this uncertain economy that attitude is downright stupid. Very few career choices are safe from being eliminated in this day and age. Employers are working hard to eliminate overhead by installing machinery to do the work of humans. We are already seeing the signs of it in self-serve checkout lanes, drone deliveries, and automated ordering kiosks in restaurants. Tesla is even developing a driverless semi-truck that could eliminate the need for long-haul truck drivers. If they can’t automate it they will try to outsource it to a nation whose workers will do the work for a lot less money than Americans can.
Don’t believe me? Call a customer service line and ask what country the operator is from…if you can actually reach a human.
I foresee a huge shakeup in the coming years, a shakeup where countless people are forced out of a job due to technology and outsourcing. Many of those people won’t be willing or able to retrain themselves in order to secure another job.
Those unfortunate souls will be screwed unless they prepare in advance.
How to Survive the Coming Economic Shakeup
Start living on less. Eliminate those nonessential recurring expenses that are draining your wallet dry. Live smaller. Two people do not need to live in a five bedroom house with multiple bathrooms. Get rid of your debt. Cancel those stupid subscription services for movies, music, books, and software that leave you with nothing when you can no longer afford to pay the bill. It might seem nice to have a huge library of music, movies and whatnot to choose from but it downright sucks when you lose your job and realize that you have nothing physical to watch, read, or listen to at home.
Stop caring what other people think. If someone gets upset because you happen to live in a cheaper part of town or drive an older car, they aren’t worth your time anyway. Why endanger your future for them?
Use what you have already. So what if you have a huge movie collection on VHS? If they still play, don’t replace them with DVD until they break. The same goes for music on vinyl or cassette, appliances that are still functional, and furniture that still does the job. If your old couch is starting to look a bit ratty, toss a cover over it and go on. Paint that old table if you don’t like the color. Hell, sometimes all you need to do is just clean the damn thing to give it a new lease on life.
Just because it’s old doesn’t mean that it isn’t any good. I know people with 50-year-old coffeemakers that are still going strong. You don’t need the fancy extras or new-in-style color coordinated crap to cook your food or wash your clothes. You just need something that works, so use your stuff until it dies.
That goes for clothes too, but that’s a whole ‘nother rant so I’m just going to leave that right there.
Don’t own more than you need but don’t get stupid and throw everything away. It pays to have a spare car if you need it to get to work and your current one dies. The same goes for any essential item you have laying around. If you have a safe place to store it (and don’t have to actually pay to do so), keep it for when you need it. When the spare begins to die, that’s when you need to go shopping.
If you don’t really need it, then think hard on whether or not you should keep it. If you can walk to work and to the store, can hop a bus or hail a cab in the event your car breaks down, you might not even need a vehicle at all. When I decided to live a full year without one in order to share my experience with others, I discovered that I didn’t even need a car so I never bothered to replace it.
I’ve lived over three years without something I thought was a necessity and I don’t have a single regret.
Lastly, stop buying stuff you don’t need. You don’t need to eat out every single day any more than you need to buy a new pair of shoes because they’re in style. You don’t need to redecorate or remodel unless you have to tear something out due to needed repairs.
I could go on but you get the picture. You’re not stupid or you wouldn’t have stumbled upon this website to begin with. Use your brain for something other than a hat rack, folks!
When the shit hits the fan, whether the breadwinner gets sick or hurt, whether you are downsized out of a job or your house gets transported to OZ, you need to be financially nimble enough to recover from the blow. It’s kinda hard to make a thousand dollar house payment when you have nothing coming in.
The lower your expenses are, the easier it will be to pay the bills until you get back on your feet. When money is flush, stash it away instead of blowing it. Splurge a bit, sure, but don’t spend all of it. The money you save can literally save your ass.