Why the financing stigma?

posted 3 years ago in Rings
Post # 3
Member
2696 posts
Sugar bee
  • Wedding: June 2012

..I guess I didn’t realize there was a stigma, b/c I don’t see the big deal either!

Post # 4
Member
657 posts
Busy bee
  • Wedding: November 2013

@Little_Hedgy:  I feel the same way, FI financed my rings (they’re paid off now) and I see no issues with it. Not everyone has a couple thousand dollars just sitting around to spend on rings.

Edit: I noticed some bees mentioning paying interest on them since they’re a luxury. I’m pretty sure people purchase things on credit cards that are luxuries but even then FI (and many others I know) were able to finance the ring with 0% interest if they paid it off within a certain period of time, which he did. 

Post # 5
Member
3200 posts
Sugar bee
  • Wedding: August 2011

@Little_Hedgy:  I don’t think it’s due to the fact you’re making payments but it is the interest that you are paying for an item that is purely  a luxury.  

Personally I think if you fianance a ring to help establish credit and you have 0% than it is a worth while thing to do.  But you can find a ring for every budget and a ring outside of your budget is not a necessity as oppose to say a car which is a necessity (depending on where you live).  

Post # 6
Member
3199 posts
Sugar bee
  • Wedding: October 2013

@Little_Hedgy:  we financed ours. both my rings, that is. he wanted to get me tiffany, i said no, so he got tacori. it was still way outside my budget, but he was determined to give me something that would ‘make sense’ later in life when he is a practicing attorney. he made payments on my e-ring for two years and he just paid it off last month. i paid for 90% of my band price, took me about 6 months to pay it off.

to each their own. we don’t have a lot of debt other than student loans, we don’t have car payments or a mortgage (yet), so for us the $200 a month payments weren’t an issue for something we really wanted to invest a lot of money in. i know not everyone sees it that way, though.

FWIW, ours were financed with 0% interest.

Post # 7
Member
4494 posts
Honey bee
  • Wedding: November 2012

I think a lot of it is because rings are luxury items that really don’t serve a practical purpose.  Depending on the circumstances, financing a luxury item can be a sign that a person’s living beyond their means.

Post # 9
Member
6407 posts
Bee Keeper

Because a ring is a luxury purchase that has no increased utility as price goes up, it seems impractical to buy one that one cannot pay for in full.

I feel that many people make impractical purchasing decisions and live beyond their means.

I also think that our culture has this attitude of, “If you have money, you must spend it.” Building savings is just not done these days. It’s all about consumption, consumption, consumption. I feel that this is a dead end fiscally, culturally, psychologically and environmentally. I’m an advocate of spending less than you have, taking pleasure in watching your savings grow, considering purchases carefully, analyzing the true reasons for your material “wants” and “needs”, and thumbing your nose at pressure to spend to keep up with the Joneses. So, if that’s how I feel about spending money one does have, understand that it’s even stronger if one does not have that money yet and must borrow for it!

This is coming from someone who only uses credit cards to build credit (and so pays off the full balance every month), has no debt, and is only planning to carry a mortgage as a debt. Who knows, catastrophe may happen and I may have to take on more debt than I plan to, but it won’t be for luxury items.

Post # 10
Member
1768 posts
Buzzing bee
  • Wedding: June 2014

I would never judge someone and their financial decisions, however I strongly feel that financing is bad news bears.

 

The only reason I feel this way is because I feel like a lot of times people “finance” things without realizing what that truly means. When you finance a purchase, you are buying something on credit (aka, it’s the same as opening up a new credit card for that purchase). Even if you get an 18 months no interest plan, and you pay it off before the 18 months is up, it’s bad for your credit profile (it increases your credit use, while decreasing your average length of credit, both of which are bad). If someone realizes this and still decides to finance, then whatever. I think people hear “finance” and think it’s a good deal that a store is offering, when in reality there are long term consequences that will affect your financial health down the road (seriously – just one hard inquiry into your credit profile (which is what this “financing” requires, can drop your credit score 20 points – this can take YEARS to fix!). Generally, though, you’d be better off using an existing credit card that offers rewards and points, or, of course, paying in cash. Layaway is also a wonderful option that won’t affect your credit and allows you to make payments over a long amount of time.

 

Post # 13
Member
2546 posts
Sugar bee
  • Wedding: April 2013

i think it’s silly to pay interest in a luxury item. i’d rather get a cheaper anything than pay interest for something i don’t actually need. i consider it living within my means.

Post # 14
Member
4494 posts
Honey bee
  • Wedding: November 2012

@StL.Ashley:  These are good points.  I wish our country was better about financial education, because a lot of people don’t realize this.

Post # 15
Member
1102 posts
Bumble bee
  • Wedding: May 2013

It’s the idea of starting off your marriage with unnecessary debt. Whether you pay your debt on time or not the amount of debt you have will affect your ability to purchase a home if you are financing. I am against debt for rings, furniture and other luxury items that can’t be paid off short term ( the next month). A car is different as it is a necessity and a much larger purchase. To each their own, do whatever works for you! But in general the less debt, the more money you will have to pay off unforeseen expenses in the future without adding more debt on top of debt!

 

 ETA: if you are not planning on financing a home, interest free debt (especially if you are earning more interest in the bank) is not a terrible idea as long as you have the funds available and are actually earning that interest (ie- not using that money for other purchases) -Always better to be conservative with your spending but than again I’m an accountant 🙂

 

Post # 16
Member
4494 posts
Honey bee
  • Wedding: November 2012

@Little_Hedgy:  Yes.  Most people I know who finance their luxury cars do so because of a Keeping Up With the Joneses mentality – they wouldn’t be able to afford the car WITHOUT financing. Under certain circumstances, financing can make sense, but it’s not too common.  For example, my husband financed his car (which is a luxury car), BUT he could have bought it cash if he’d wanted to.  The reason financing the car was a better call in this instance was because it was a very low interest rate less than inflation, and it allowed him to invest more of his money in funds and his 401k for a higher rate of return.  Plus this particular car has good resale value, so when it comes time to sell, it won’t depreciate as massively as most cars do.

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