Financing something?

[Anonymous]

I want to finance something for $12,000. It is for pleasure. And I have wanted something like it my whole life, I have $7000 to my name, and make $1750 a week, I would put down $5,000. Interest rate is 16%. I am not in any debt and drive a $1300 beater car. No loans or anything. My rent is $500 a month. I’ve never saved this much money before, I don’t really buy anything besides food. I wanna say if I had $12,000 I wouldn’t be able to dump it and buy the thing, so I understand people will say “ they you don’t actually want it” and I know the interest rate would be 0 if I just bought it. Wouldn’t say I’m impatient, but if I were to buy it outright I’d want to have a lot more saved. Is financing this an awful idea.

[Oliverlogan263]

Woah, $12,000 on something just for pleasure? That's a pretty big financial commitment, especially with that 16% interest rate. I can understand the temptation, but I gotta be honest - that seems like a risky move, even with your decent weekly income.

Let's break this down: you've only got $7,000 saved up right now, and you'd be putting down $5,000 to finance the other $7,000. That means you'd be taking on a pretty hefty monthly payment for the next couple years, just for this one luxury item. And with that sky-high interest rate, you'd end up paying way more in the long run.

I get that you really want this thing and you feel ready for it, but the smart move would probably be to just keep saving up until you can buy it outright. That way, you avoid the interest and monthly payments, and you know you've got the funds to comfortably handle it.

Plus, with only $7,000 in your savings, you don't really have much of a financial cushion right now. What if an emergency pops up or your car craps out? That $12,000 purchase could put you in a serious bind.

My advice would be to keep diligently saving up your weekly income. With $1,750 a week, you could probably have the full $12,000 in less than 2 months if you really buckle down. Sure, it might take a little longer, but you'll feel way better about it in the long run.

I know it's tough to delay gratification, but trust me, it's worth it to avoid the stress and debt of financing this. Save up, pay in cash, and then you can really enjoy your purchase guilt-free. Your future self will thank you, luv!

[slatyb]

16%? That's very high. 16% of $12000 is $1920, or $160/month. Also you should be wary of spending $5,000. That would leave you with only $2000 and leave you vulnerable to any unexpected expense. You make $1,750/week and have relatively low expenses. How much are you saving?

[Anonymous]

Perspective is everything. I had about as much saved at your age and I made considerably less. But 7000 isn't much to me now. I couldn't have imagined dropping 7k all at once on something. I'm a big believer in it's always better to NOT finance if you can swing it. But your age since you're still likely building your credit it wouldn't be the worst thing in the world.

[HelpfulWoman]

if possible, always save and buy outright

[jahaims]

That's why poor people stay poor

[Iron_Man]

What is it