Spending Your Way To Bankruptcy?

Well, it takes a lot to surprise me any more, but,

Bankruptcy spending
Bankruptcy Attorney Office

this one caught my eye:

Millennials financing sheets and concert tickets

I mean, huh?

Maria LaMagna has the story on MarketWatch.

The company Brooklinen sells pricey sheets: its “classic” sheet set for a queen-sized bed costs $129. But that can be steep for millennials, people born between 1982 and 1996, who are a core demographic for Brooklinen, said the company’s co-founder, Rich Fulop. “They want to pay more, they want to upgrade, but they don’t necessarily have the means to do that,” he said.

What’s more, the company also sells to city dwellers who are looking for just a few sets of sheets to outfit a one-bedroom or studio apartment, he said. They’re willing to invest in higher-quality sheets, he said, even when they don’t have the money up front.

Uh, sorry.  Bedsheets are not an investment.  They will not increase in value.  No one has bedsheets in her retirement account.

Yikes.

 Brooklinen partnered with the payment company Affirm in June to offer a payment plan spread over three, six or 12 months. Financing doesn’t come cheap: Rates range from 0% to 30% APR, after Affirm checks the buyers’ credit and approves them. That compares to an average APR of almost 17% for credit cards— or zero if you’re paying with cash.

Don’t.  Do Not.  Do not finance concert tickets or bed sheets.

Financial Illiteracy

Maybe youngsters are making these poor financing decisions because they do not know any better.

Kathleen Elkins writing for CNBC:

Suppose you have $100 in a savings account and the interest rate was two percent per year. After five years, how much do you think you would have in the account if you left the money to grow?

Imagine that the interest rate on your savings account was one percent per year and inflation was two percent per year. After one year, how much would you be able to buy with the money in this account?

The third question in the survey was tricky, which is a better investment, one stock or a mutual fund?

But 70% flunk rate?

This stuff, basic household economics, should be taught in middle school.

It seems to me, that if folks understood how much extra it cost to finance those fancy sheets, they would make a different decision.

The best way to buy concert tickets or bedding?

Save your money and pay cash.

If you are already too far down the spending road to see your way out, contact me.

 

 

Digiprove sealCopyright secured by Digiprove © 2017 Kurt O'Keefe
If you enjoyed this post, make sure you subscribe to my RSS feed!

Sorry, comments are closed for this post.