After racking up thousands of dollars in debt, some borrowers are deleting the apps from their phones to avoid getting prodded to spend more.
Many consumers find buying now and paying later a godsend when cash is tight. Others are wishing they’d paid upfront to avoid pain later.
Tia Whiteside, 27, knew she was spending more than she would have without buy now, pay later services — the popular loans that let borrowers split purchases into installments with little or no interest. Planning a day trip to the beach with her 2-year-old son last year, she spent $800 on Amazon purchases including a tent, new outfits and a high-end sandcastle kit with the BNPL provider Affirm.
Whiteside, a Greenville, South Carolina-based behavioral analyst who treats childhood autism, makes good money; she and her husband bring in about $110,000 per year combined. But the $6,000 in BNPL loans she’d racked up over roughly two years felt frivolous, she said, especially because they’re planning to buy their first home.
“I was just seeing my paycheck continually eaten up,” said Whiteside, “and I was like, ‘Where’s my money going?’”
$800 on a day trip to the beach?? Thats insane to me.
Also never understood why anyone would you those options, they have always seemed like trap. Have some self control
Why do you even need a tent for the beach? Are you camping out there overnight?
I could see it being useful for keeping the sun off, serving as a refuge from insects (depending on the local biome), perhaps serving as a changing room for privacy. But yeah, it should hardly be necessary. Just another frivolous expenditure, only do it if you can genuinely afford it.
If you’re spending $800 for one day at the beach its cheaper to get a day pass to a mid-to-higher end beach resort and rent a cabana. You’ll get a better experience, staff that will cater to your needs and still be cheaper than $800 for one day.
I imagine it’s more of a canopy than a sleeping tent. Something like an EZ up tent that provides more shade than just an umbrella.
I’ve used them and they’re pretty nice, especially if you’re going to be at the beach all day and don’t wanna get sun burned. That being said, it’s still a big purchase for just one day trip. I’d only invest in one if you were using it regularly, or had like a week-long trip planned.
I think I’ve seen those before. And I believe when I did, they were renting them out for the day like they do with chairs and umbrellas. Which I’m guessing is not uncommon at beaches.
I honestly don’t understand why anyone thought “buy now pay later” was anything new. Usury is among the earliest professions.
If you wait long enough to pay it back then there will be movement in the markets, so there is still going to be interest.
That only disbenefits the consumer if the economy goes through deflation. If the economy more typically sees inflation then it disbenefits the lender.
The problem isn’t change in purchasing power of the funds, but death by a thousand cuts. An extra $30 a month sounds reasonable - just a dollar a day - but when you layer on several of these at once then it quickly adds up.
A couple of weeks back there was an article making the rounds of the fediverse about how people with reasonably decent incomes were nevertheless living “paycheck to paycheck”, and a number of examples were given in the article with their individual stories of woe about how they were baffled by how burdened with debt they were. Most of those stories, when you dug in with just a slightly critical eye instead of an automatic assumption of victimhood, revealed people making foolish choices to take on debt and support the maximally lavish lifestyle that they could manage.
The comment section was weird. It turned out that there were some people there who thought this was perfectly reasonable, giving examples of “necessary expenditures” from their own lives that were just as excessive when examined. If you think that building a deck or buying a new bed simply because it’s “time for a new one” are necessary expenditures then it’s kind of hard to be sympathetic when you complain about how you have no money for long-term savings.
Is there just some basic personality type that finds it hard to be responsible with money, or is this a failure of education somehow? I have ideas for how to help but help will be unwelcome by people who refuse to recognize that they have a problem.
simply because it’s “time for a new one”
Depends. There are probably people who say that after a few years, and others use it for 10-15 before making that exclamation. In which case the choice for a new bed is (depending on your choice) no longer a luxury expense but a maintenance one.
Is there just some basic personality type that finds it hard to be responsible with money, or is this a failure of education somehow? I have ideas for how to help but help will be unwelcome by people who refuse to recognize that they have a problem.
I think a few things come together to bring us here:
- Modern education has completely abandoned teaching personal finance to kids.
- Modern payment technology (credit cards, tap to pay, apple pay) have separated us all from the tangible feeling of spending our cash on stuff. Now we don’t even swipe a card or hand over a credit card to pay for something.
- Influencers and social media create new, unrealistic expectations of lifestyle.
- Highly targeted advertising on the web, in apps, and through paid influencers and social media, finds people at their most vulnerable moments and suggests that they buy stuff. Companies are targeting the weaknesses in our psychology and it’s hard to withstand that onslaught.
Ah the person that complains they had to tap into their investments because you need to periodically get a new bed and redo your deck and can’t save money. Yes I got downvoted for providing basic personal finance recommendations there!
I think the problem is a combination of the things you mention, and the fact that society is just normalising stupid spending, waste of resources and spending everything you earn, if not more.
When on reddit, I was active on personal finance subs. The amount of people asking for suggestions on how to improve their budget that didn’t see anything wrong with 10-12 subscriptions for shows and music, on top of astronomic phone bills, eating out etc was crazy. At least they took the first step, wrote down their expenses, and were asking for help. The bed/deck guy was just pure madness.
I commented there, and while I do lean towards the idea that personal finance literacy is an issue, I don’t think that it’s purely a matter of self-control. I don’t think this is necessarily a “Bob knows that he should spend N and save X but instead spends N+X” situation. I think that some of it is that people do not really have a great idea of what they should be doing in terms of personal finance. Like, what is a reasonable amount to be spending? How much should I be spending on housing? How much should be going towards retirement? How much of an emergency buffer should I have? What should I do with money that I save?
I think the answer is in your first sentence, personal finance literacy. At least in my case reading about it, learning the basics (six months expenses emergency fund, pay credit cards in full every month, invest in ETFs…) and understand other people’s strategies is all it took. Hate to say it but I owe reddit one for all that knowledge.
Yes. Absolutely there is, the personality thing. It’s undiagnosed learning disabilities, ADHD or just a straight up person who would have been a well regarded hunter a different century.
A high end sandcastle kit?
I guess maybe something like this:
https://www.amazon.com/PUFFERFISH-Sand-Castle-KIT-PRO-Quality/dp/B08GYLQGKR/
high-end sandcastle kit
I mean, we built some pretty neat sandcastles as kids with our hands. Dig a hole, put the sand in front of it as a barrier, scoop up sand+water from the hole and create “drip castles” with turrets and such that harden as they dry.
If you’re buying decorations, I’m thinking that it’s gonna be liable to wind up with plastic decorations or something left behind.
And in that case…I mean, the kid is 2 years old. I figure that she probably wants the best for him and all, but…I’ve seen a lot of 2-year-olds enjoy the box that a toy came in a lot more than the toy. I dunno if his sandcastle experience is gonna be so much more awesome with some kinda kit than just experiencing and learning how wet sand acts…
