The other day I received an ad in the mail from my local rent-to-own company, attempting to get me to come visit their store and leave with some great merchandise. I have always known that these stores were a rip off and I never understood why people would go to the stores until I looked at the ad.
The main attraction on the ad was a 60 inch TV that you could rent for $100 a month. That doesn’t sound like such a bad deal, until you look around at other stores and see that you can buy that same TV for about $1,400. Or you can rent-to-own for $100 for 24 months and it’s all yours … at about 70% more than what you can buy it straight up for!
Another example in the ad was a laptop computer. It can be yours for only $99 a month for 12 months. Or you can just save the $99 for four months and buy it yourself for $399 at your local electronics store.
This is a perfect example of why you need to ask yourself how much instead of how much a month when looking at making a payment. If you look at the total cost of the TV you will realize that you could just wait, save up the money and buy it outright in 14 months. Whereas if you did the easier thing and just looked at the $100 “low” monthly payment you could rationalize and talk yourself into doing it. But once you get control of your money and look at your finances in the long run, you won’t be enticed by these ads and instead you can just simply put them into the recycling bin.