Comments on: Thinking Only About the Monthly Payment Is Stupid

By: empty spaces

empty spaces — Tue, 12 Sep 2006 17:43:09 +0000

I hate it when a salesman says its only $x per month. Got suckered into attending a timeshare presentation in Vegas. its only $215/mo for the next 10 years! no matter that I’m buying a $250k condo for $2.5 million. When I pointed this out, he then switched tactics to point out the tax benefits and other rubbish.
Amazing how people get bamboozled into this crap.

By: bishophicks

bishophicks — Tue, 12 Sep 2006 15:05:43 +0000

The “only $X more per month” also disguises that actual cost of what you are buying. Car salespeople love to do this. The first time I bought a car, I got a stereo/CD changer upgrade because it was only $10 extra per month. When I later looked at the full invoice, the actual charge for the upgrade was $1,000. The same item was available for $600 installed at Tweeter.

Speaking of HDTVs and TCO, I have no interest in upgrading to an HDTV because in addition to spending thousands on a TV, I would need to upgrade my cable service and replace the TV cabinet and matching bookcases I now have. Total cost of an upgrade for me is over $5,000. No thanks.

By: Anonymous

Anonymous — Tue, 12 Sep 2006 12:38:18 +0000

Speaking of mortgage payments beware of real estate agents who magically add up a set of numbers and then tell you “Well according to these figures you can afford a house up to X amount of dollars”. A few years back we were told we could afford a house that was over 3 times our annual income!

By: Debra

Debra — Tue, 12 Sep 2006 01:52:51 +0000

I agree that thinking in “monthly basis” terms is a recipe for disaster. When I think of how much something is going to cost me annually it puts a whole new spin on things and is much more realistic in terms of determining this cost into my budget; better to look at total cost.

By: Special Ed

Special Ed — Mon, 11 Sep 2006 15:25:22 +0000

This is how many people got sucked into ARMs with payments that have become unmanageable and interest only loans that are real wealth killers. Short term thinking produces terrible long term results.

By: samerwriter

samerwriter — Mon, 11 Sep 2006 03:21:01 +0000

I agree completely, but with the caveat that even for a mortgage you should first make sure that you can “afford” the total amount, then worry about the monthly payment.

I’ve seen a lot of people buy more house than they can reasonably justify just because they can “afford” the monthly payment.

By: fivecentnickel.com

fivecentnickel.com — Sun, 10 Sep 2006 03:11:16 +0000

Weekly Roundup – 09/08/06…

Here’s a quick look at some of the personal finance posts that caught my eye over the past week…
Jim has a list of credit cards that offer 0% balance transfers. I’ve never gotten into the 0% BT game, but it sounds like it can be quite…

By: Dave

Dave — Sat, 09 Sep 2006 17:37:26 +0000

I don’t think they’d know what an abacus was.