For instance, you could buy clothes or household appliances on a whim and pay for them in a series of regular monthly payments over a set period of time. PHOTO | FILE
Fourthly, monthly payments stop us from saving for anything. If you can buy now and pay slowly, you’ll have no incentive to save up for big ticket items. People are no longer saving for holidays because they can be financed.
Saving up will allow you to see how much of a holiday you can actually afford and you won’t be left struggling to repay a loan after the fact. How about saving for that car you want using the cash you would make repayments with?
When the monthly repayment becomes a way of life, we also tend to make it our motive to earn more money. Many people want to earn an extra Sh30,000 simply because they have either overextended themselves and need to make their payments
Many years ago, I used to wonder about the Western culture of buying things based on a monthly instalment plan. For instance, you could buy clothes or household appliances on a whim and pay for them in a series of regular monthly payments over a set period of time.
So you wouldn’t have to pay the $300 (Sh30, 000) for the item you desired upfront, but instead, when you bought it through a store card on an instalment plan, you’d just had to pay something like $15 (Sh1, 500) a month for three years. If a new phone came out, you didn’t have to worry about not being able to afford it, after all, you could always take it on a (monthly payment) plan. Seems like such a bargain, right?
