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there were two born that minute...

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shardian:

--- Quote from: patrickl on May 01, 2007, 08:48:31 am ---I can understand people borrowing money to purchase an expensive item, but I don't understand people having a debt last longer than the "life" of the item purchased. If you buy a car the loan should end when you don't own/use the car anymore otherwise you just go down in debt further and further.

--- End quote ---

What usually happens is that the person has no sense of value, interest, or amortization. They pay too much for the car in the first place, then they get bored of it, wreck it, need cash fast, etc. Any way they cut it, they end up selling for less than the remainder of the loan. The worst part is that they probably got the loan as a no down payment/ high interest and or long repayment period. They actually think that  when they pay that $150-$200/month on the car payment that it is going towards the value of the car. WRONG!!

This is why I think basic life skills should be taught in high school. Those skills are MUCH more important than placement tests for 99% of high school students.

Loki:
Never buy anything when you don't have the money... simple as that :)

For a house it's another story of course, but a car or luxuries you should just save money till you can buy it.

ChadTower:

Depends on where you live for the car.  Here, if you don't have the car, you probably can't work, so you can't earn the money.  Plus your family has to eat and live in a building and wear pants in the mean time.

shardian:

--- Quote from: ChadTower on May 01, 2007, 08:59:16 am ---putting consumables (dinners, entertainment) on credit are just bad personal finance.


--- End quote ---

It depends on the person there. A responsible person who is knowledgeable can use credit cards as a financial tool - and even profit from it.

Personally, I have two credit cards I carry - one for gas, and another for purchases. I always pay my balances in full, and keep track of all purchases on a regular basis online and by paper reports. I get 3% cash back on the gas card, and receive amazon gift certs from the other card. In effect, I am getting PAID by the credit card companies for letting them do my bookkeeping. ;D :laugh2:
I also have a Home Depot CC that I use to get 0% interest on large home purchases. I took their 1 year 0% interest PLUS 10% off deal to fund my bathroom renovation. ;D

Of course, not everyone can do this with credit cards. Although I'm sure they could if they were properly educated and/or learned from others mistakes.

Loki:
My parents both have their own car and my dad is planning to buy a motorcycle... all without loans... they are fine cars bought 2nd hand.
You don't need an expensive new car just to get from point A to B

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