Why Debt Stinks: Sometimes It Forces You To Make The Cheap Choice
Another side effect of being in considerable debt is that you may have a lack of available funds to make the frugal choice vs the cheap choice. I talk a lot about being frugal vs being cheap, and how I work out the difference for myself. A core tenet of frugality, to me, is making the most cost effective choice for the long term, even if it isn’t the least expensive option in the short term. Being cheap is simply choosing the least expensive option no matter what. It isn’t always clear what the best long term option is, but making the effort to try and discern it and using your resources wisely to try and make that frugal choice is important.
This was brought into focus for me with our recent furnace purchase. We were originally told that we could fix what was wrong with the furnace for less than what a new furnace would cost. But the problem with that choice was that the age of our furnace dictated that we would simply being doing that as a stop-gap measure, and that the furnace itself could die at any time, effectively wasting the money we put into fixing it (which would have been between $600 and $1000). Clearly, replacing the entire unit was a better way.
But that is where debt comes in to bite you. Fortunately for us, the timing of the furnace event meant that we could come up with the money to replace the furnace in cash and not have to worry about adding to our debt at this time or getting behind on our other debt payments. But that certainly was not necessarily the case. If we didn’t have the money to replace the furnace, we may have been forced to choose to repair the existing until instead and hope that it lasted long enough for us to be able to afford to replace it. Because so much of our income is directed towards paying off things purchased or done in the past, it limits our choices for the future, and sometimes can but that smart choice out of reach.
Debt. The double-edged sword. Can’t just make it disappear, and can’t stop it from affecting the future while it reminds you of the past.
If you enjoyed this post, make sure you subscribe to my RSS feed!
You can also: Stumble It! Bookmark Submit to Reddit Submit to Tip'd
May 16th, 2008 at 8:22 am
I have the same problem when buying clothes for the children. I know that paying more will mean that they last longer, but I cannot justify that money and so tend to buy cheaper things that wear out before they are grown out of.
May 16th, 2008 at 9:30 am
“Because so much of our income is directed towards paying off things purchased or done in the past, it limits our choices for the future,”
I really think this line speaks volumes about debt and its effects. Good post.
May 16th, 2008 at 6:22 pm
I’ve lived this unhappy principle for most of my adult life, but I’ve never felt the consequences quite as deeply as I do now that I am a homeowner. Our bathtub surround fell apart two years ago and the best we could do at the time was sheets of crappy fiberglass- not even the pre-molded unit! I can’t wait to get out of debt hell!
May 17th, 2008 at 1:08 pm
This is so true. And it’s awful looking at the choices we really have to make right now, knowing that in the long run they’ll come back to bite us, but we just can’t afford to make the more sensible decision.
May 18th, 2008 at 4:06 pm
I think buying things that last is important part of being frugal. I made a decision long ago to not skimp when it comes to that sort of stuff.
I never buy cheap just for the sake of not spending money….becuase you always end up buying it again becuase the cheep one was…..well……l cheap.
May 22nd, 2008 at 11:53 am
There are some products that I don’t take the cheap route on like eyeglasses since I wear them everyday. Sometimes you just have to spend money. Thank goodness for an emergency savings.