The Social Marginal

In the past I reminded everyone to be aware of their financial future, but I didn’t really go into how to actually plan for it.  I’ve dealt with this topic quite a few times personally while informally counseling people of various ages, from 14 to 57 on how to effectively plan for their future, and most importantly educate themselves on the topic.  One of the main points with any financial plan I help to lay out is to rule out Social Security as a viable source of income after 55/59.  Perhaps I’m a cynic for doing so, but regardless of what happens with the Social Security system in the future, it means that if you end up being able to collect on it, it’s just more money above what you already have coming in (hopefully enough to support you already) and will just make life easier and perhaps a bit more fun for you in your retirement years.

So I’m going to do my best in offering my advice for the various age groups over a series of posts to help educate them in how to best plan for their financial future.  The reason I am splitting this into age groups, three for the purpose of these posts, is because while some of the fundamentals stay the same, the process is very different depending on at what age you really become ‘financially aware’ and start planning (though all the previous posts should apply to the later).  In this post I’ll be focusing on the simplest demographic, individuals under thirty who are starting out with their financial lives and are motivated to prepare for their future from the beginning.  I won’t be touching on budgeting in general, as the topic is covered ad nauseum elsewhere and sort of just comes along with financial responsibility.

Step One - Educate Yourself

While you already are beginning to do so by reading this, I am not the best source of information for this and you really need to pick up some books on financial planning so that you understand all of the basics.  The ‘right’ books vary for each individual, and there are millions out there, I suggest simply browsing the isles at your local Barnes & Nobles or on Amazon and finding something that looks right for you and will keep your attention while reading it.  Doing so will teach you important basics such as the different between a Traditional and a Roth IRA, how to calculate the true APY of an investment product given the tax rate you’ll be paying on the dividends, etc.  The point is, even if you plan on using a financial planner to manage your assets, it’s your responsibility in this day and age to be aware of all of the aspects of what they are doing with your money so that you can be aware of how your money is really working for you.

Step Two - Pay off your Debt

Here’s another obvious one, but one that still needs attention.  You need to get rid of all of your irresponsible debt (and yes, I believe there is such a thing as responsible debt, see here) before you are able to start building wealth and preparing for your financial future.  I personally recommend the snowball method, starting by paying off the highest APR debt you have and working your way down, increasing the payments towards the next debt with each previous paid off until you’re done.  Student loan debt is a touchy subject in this area, but one that I do believe in including in your payoff and not carrying them, regardless of the interest rate.

This is likely the single most important aspect of financial responsibility these days.  When you have no revolving or installment debt hanging over your head (other than your mortgage and such, if it applies), you can really start making credit products work in your favor and turn them into an effective, responsible consumer tool.  In the end, your will power and ability to control your spending will dictate the decision of whether or not you should be using them at all.  Educate yourself on the topic, but when doing so, do your best to get multiple viewpoints and decide which mix of methods will work right for yourself (Please don’t blindly rely on Dave Ramsey for this one), there are numerous blogs dedicated to this topic as well, including Master Your Card that can teach you to responsibly utilize your credit.

Step Three - Start Saving

After debts are paid off, people tend to want to jump right into investment vehicles with their excess income and think that they are really ’saving’, they aren’t, they’re investing, just like the name implies.  They share similar attributes in the ability to earn you dividends on your money, but the main issue is that savings should be at least semi-liquid and accessible with no chance at losing value while those qualifications do not apply towards investments.

I suggest opening a minimum of two High Yield Savings accounts (I use and recommend ING Direct, but basically by high yield, I am not referring to the 0.15 APY savings account attached to your checking account at your local bank), an emergency fund as well as a discretionary spending fund.  The first account to build up should be your emergency fund, which I recommend being equal to a minimum of three to six months of your total monthly take home income, this account should only be accessed in the case of an emergency and only when your discretionary savings account is tapped out  (ie, you lose your job, you have a health emergency, etc).  After you’ve finished building up your emergency fund, you can move on in your financial plan.  The second account, the discretionary spending account, should be used to sock away all savings and excess money not to be immediately paid out in your checking account, this is the account that the money for that spiffy new television should be coming out of, don’t be scared to have a lot of activity in it (though hopefully the majority of it is incoming activity).  A discretionary savings account, if you really do sock away your excess money into it, also helps to curb impulse buying and encourages responsible consumer behavior.

Step Four - Invest, Invest, Invest

Now for the fun part, and the part you need to really educate yourself on before you start, investments.  Once you have an emergency fund built up, while a portion of your excess income should be going into your discretionary savings account, I recommend the majority of it be put into investment vehicles for long term growth.  Open a brokerage account so that a portion of your investments are somewhat liquid and you can have some ‘fun’ with them, as well as an IRA to prepare for your retirement and do your best to max out your contribution every year (the choice between a traditional and a Roth is a personal one and you should educate yourself on the difference and decide which is best for you).  If your employer offers a 401k or similar retirement investment plan that makes sense, definitely take advantage of it, especially up to any amount they will match your contribution (if any).

Keep a watchful eye on all of your investments, don’t be afraid to redirect (or to weather a storm, on that same thought) and adequately diversify and you’ll see your wealth grow exponentially over the years.  Investing can be a lot of fun and I really do recommend you manage your own portfolio, providing you have educated yourself properly; but if you don’t have the time then you shouldn’t be afraid to find a licensed individual to handle them for you, just make sure you find someone that’s right for you and keep them accountable, making sure that they are focused on your goals.

Wrapping it up and Keeping it up

If you follow the above steps, you’ll have a good start on preparing for your financial future.  The main issue at this point is to keep up the motivation in saving/investing, staying out of debt, and controlling your spending.  If you have a spouse, share the financial planning with them and include them in it so that you can keep each other accountable.  Remember that this is only a starting point and ultimately you should adapt a plan that is specifically appropriate for your situation.  In the end, the only person you should rely on for your financial future is yourself and you should be confident in providing for it if you budget properly and follow the above steps, regardless of your income.

Good luck on building your financial future, and if you’re in the thirty to fifty year old demographic, I’ll be addressing some unique issues regarding your options in the next post in this series.

Investing in a friend’s small business while it is either just getting started, needs additional capital to expand further, or just investing your time in helping them grow the business with your experience can be a very stressful and trying test on a friendship.  The hardest part for both parties in such a situation is to really remember that ‘business and business’ and to have the discipline to keep it that way, which includes keeping your emotions in check.  However, if you feel that it would be beneficial to both parties and you can make it work, it can be a very financially invigorating experience. 

I’ve personally done this with a friend’s business by investing both a good deal of my time and a nominal amount of money (to provide services) to help him expand and move it to that ‘next level’.  We’ve been through a lot of disagreements and trials on the business side, but in the end, as of now at least, the business continues to grow and move in the path we wanted, we still respect each other’s expertise in our respective areas and understand that they balance each other out, and most importantly, we’re still friends (he’s actually going to be best man at my wedding).

Here are a couple things which we did that worked and carried us through an expansion experience with me coming into an existing company to assist:

1. Of course, with EVERYTHING, we drew out contracts and put it all in writing, this is a must and something that I just have to remind everyone of at every chance possible.  It keeps both parties honest and keeps the transaction completely professional.  At least it should.
2. When we first started the agreement, my expertise in certain areas were needed and he couldn’t afford to pay me reasonable rates for it.  It was going to require a great deal of my time, as it had already informally at that point, and a small amount of money (not to be paid directly to him, of course) to be able to expand to provide additional services to clients.  Since a salary couldn’t reasonably be established at that time, we agreed (completely mutually and without reserve on either side, which is important for this type of thing) that he would make me a 25% partner in the company in exchange for my assistance.  This was a fair amount given the value of the company at the time and is a percentage that must be weighed carefully based on the net worth of the business and what you’re bringing into it, but it is definitely a viable option to get things started, especially in a time investment for expansion.  At a later date, the original owner could always buy back those shares at a mutually agreed upon sum.  If you don’t understand what you’re doing or the liability risks with doing so, I suggest you seek a lawyer’s advice if you decide to go this route however.
3. When coming in, aside from offering technical services to his clients, it was also necessary for me to mentor him concerning running the business more efficiently.  This is where things can get sticky, and the only way that we could insure to it went smoothly was for him to basically agree (contractually), that for a six month period I would be his ’supervisor’ and he would be accountable to me for everything; from reviewing clients and how to deal with them, to hiring employees for jobs when needed and what jobs to actually take, everything had to be run by and approved by me.  This can be hard for a business owner but ultimately extremely beneficial if they lack business experience and you have a good deal of it; it worked well for us and the company is better off due to it, as is my friend with his improved business skills.
4. As the expansion began to come together finally and we started seeing returns from it, as we had previously discussed, a new contract was drafted and I was put on a nominal monthly salary.  This was more about keeping it professional and preventing feelings of not being compensated for your time and effort than strictly about the money.  As I said, it was a nominal amount and if it is possible, I highly suggest doing it from the beginning, even if gaining a share of the company for your assistance.

Generally a time will come when you’ll be presented with a choice about whether to stay on as a partner or to ’sell out’ and leave your friend’s business in a better situation (hopefully) than you came into it in.  I came to this point and after some discussion, we decided that, given how well we worked together, I would stay on as a partner and continue to help indefinitely and draw a salary for work as ‘Operations Manager’.  It’s not my day job, but it helps augment my other income and as a partner I have additional motivation that I’m not only helping to grow my own share of value in the company with the hard work and dedication that I put into it, but also my friend’s.

In the end, we found that it actually helped both of us have more respect for each other on a personal level and it actually enhanced our friendship.  It was because we handled it right for what we were doing and planned it out so that our differences would end up augmenting each other rather than clashing.  This, of course, won’t be true for everyone and I urge anyone considering going into an existing friend’s business to carefully consider it and find a path that is right for both of you so that you can retain that friendship in the end.

Business is Business.  Friendship is Friendship.  It’s as simple as that, and if you keep it that simple, then you’ll have a much greater chance at success in both areas.

People often approach me to help them develop plans to pay off their debts, which I am always happy to provide (free of charge) as long as they’re completely honest with me about their finances.  Often after three to six months of the changed lifestyle often needed to payoff these debts, people tend to get discouraged and start to just consider alternatives to paying them off, including bankruptcy or just stop paying all together when they could continue, don’t let yourself fall into this discouragement.

Remember that you somehow got yourself into this debt (I’ve rode that boat before as well), and that in most cases, you can get yourself out it the good old fashioned way, paying it off in full according to the contract you agreed to.  It may be hard, but just look forward to the day when you have no irresponsible debt and your FICO score says so.  Having credit is good, utilizing the majority of that credit, well, not so good.  During this process, always keep a spreadsheet showing your active debts and record them incrimentally by the month, allowing you to look at it and see that progress is being made in the process; this will help you ‘keep the faith’.

Most of all, trust in yourself and your ability to do it.  You made a decision to pay off your irresponsible debt for a good reason.  If you really get trapped into a situation where the struggling is so extreme to pay the debt off in a reasonable period of time that you’re sacrificing neccessities in life (these don’t include Cable or Going out to Eat, etc), then please seek a financial advisor.  Note that I said financial advisor and not a debt consolidation/relief company, they are two very different things.

Good luck and keep the faith in finishing your journey to be rid of irresponsible debt, if you need motivation or informal advice on a situation, you can feel free to email me at cinder@socialmarginal.com or comment here for others to provide their input.

I normally don’t do this type of thing (”Round ups” or just linking to other articles alone), but ‘Seb’ over at Pinching Copper wrote a wonderful open letter to Ben Bernanke that I thought was great and I thought that I should bring some more attention to it, a particular excerpt;

“Ben, I know you might not have realized this, but you’ve cut interest rates so far that they’ve fallen below the rate of inflation. This is very, very bad for all the other little boys in girls in America that are trying to save money and keep their heads above water. I know your “friends” are telling you that lower interest rates mean that it is easier for their banker buddies to lend money to each other, but it’s not going to happen. Everyone is very scared for their money right now, Ben. Banks don’t want to lend any more money, because a lot of broke and dishonest people aren’t paying back their loans. You might have heard about this, since you and your buddy Al Greenspan helped create the situation. You could drop interest rates to 0%, and it won’t change a thing.”

You can read the entire letter here.

When your full-time workplace is your home, you can still “leave your work at work” at the end of the day and come home for some relaxation, you just need to adopt the right mentality to be able to do it effectively.

Since moving across the country to support my fiancee in a new job position and now working full time self-employed, my workplace is my home.  To be specific, my workplace is a ‘granny loft’ upstairs in my home, and I do my best to make sure it stays there.  I’m fortunate to have a ‘granny loft’ to make into a nice sized office that has a door at the bottom of the stairs leading to it in our home, but if you don’t, any room can act as your office if you make sure that’s all it is, at the very least for a specific time period during the day.  Set up this room as a true office and make a point not to clutter it with anything else that may distract you.  The point is to make you feel like you’re truly ‘at work’ when you’re there.  Doing this also has tax advantages, consult a CPA or research yourself for further information on that.

The most important part is to set a schedule.  If possible set a schedule of hours every day where you will be working in that office and only working, shut the door to your personal life.  If you have children, this means looking into daycare for during those hours so that you can shut the door and work undistracted.  In my case, I work from 7-5pm every day, however, due to the nature of my contracts, there are times when I have to work outside of those hours due to emergencies and such, but I make a point to not allow that to effect me being back in my ‘office’ at 7am the next morning.

Finally, if you are self-employed and dictate your own work hours, give yourself vacation time and actually take it.  If you are serious about it and stick to a strict work schedule, you’ll need it, as will your family.  Be reasonable but generous, it will allow your work environment to truly become one and make it easier to become accepted as one by your family.

I’m by no means an expert at this, I’m still relatively new to it, but that’s what has worked for me and hopefully it can work for you as well.  You can be very successful in a home office if you treat it properly and you stick to a strict work schedule.  If you have ideas of your own, please comment on this post and let everyone know what they are.

I’ll start off by saying that I am far from a ‘rich’ man, I am certainly of average means, I do work hard though, and the amount that I make directly is proportionate to how much time and effort I put into it (and a little luck).  I reached a milestone of sorts today, that, aside from retirement, tax (I’m self employed), and emergency savings, I’ve finally reached $20,000 in my discretionary savings account.  The best part about it, to me, is that I only started it in September of last year with nothing.

It’s funny, I use to be a gadgetholic and spend my extra income on various things such as new laptops and televisions, etc.  Ever since I started that account, not by reading any article, but by my own internal guidance, I’ve started to see how frivilous such spending behavior is and it has innately made me into a better consumer.  Now my enjoyment comes from watching my savings account grow, knowing if there ever is that cool new toy or whatever, I can buy it, guilt-free; of if I’m surprised with a child, it will relieve some of the financial stress from it and allow me to enjoy the excitement as I should.  And now when I think about buying those cool toys it causes me to pause and consider if I truly do want them and whether or not I’ll really get a lot of use out of them, and if I don’t, I toss some money into ‘my’ account and I’m just as satisfied.  Don’t be mistaken, I don’t deprive myself of anything but guilt and a lot of waste, I still buy plenty of ‘gadgets’.

I urge everyone to open a discretionary savings account at a financial institution that offers High (relatively these days) Yield Savings and give it a couple months, if you can only afford to transfer $5-10 in it here or there, you’d be amazed at how fast it grows and how quickly you become addicted to it, and it’s a good addiction to have in my opinion.  I use ING Direct, because, well, at the time they had some of the best rates (they still do have good rates) and they have excellent customer service and make it easy to transfer money between accounts when needed, regardless of your needs.  Watching that little “Interest Earned this Month” total at the top of the Savings account page is certainly satisfying.

Ok, that’s all, I’m done bragging; certainly not about the amount of money saved for ‘no reason’, as it’s miniscule compared to most I’m sure, but about having the self-discipline to make my plan happen and to reach this, what I feel is an important milestone in my financial growth.  Hopefully when people see this that are knee high in debt and have no savings, they will realize that it is possible to turn it around and start living without (relative) financial stress.

I know it seems like common sense and that you probably believe that you already are aware of your overall financial future, but are you really?  With this post I aim to pose that question to you, not necessarily give you a formula for an answer or a full plan to implement, but rather to motivate you to research and create such a plan should you not already have one.  I will assume that you’ve already dealt with all irresponsible debt before moving forward.

A good number of the members of the Baby Boomer generation are heading towards retirement age without retirement funds to support them in retirement, thinking they are going to just have to work the rest of their lives (see increased IRA contributions with age, etc. and consult a financial planner if you’re one of these people, there might still be a way ‘out’).  Then we have the GenXers who are hitting their thirties and for the most part (at least ones which work in the corporate world or are self-employed, which is the demographic I would be refering to) which have been contributing to 401ks, IRAs, and various other retirement programs for almost a decade now and if they continue responsibly to be on track to retire whether or not social security payouts are around when they hit 55 (or 59 if you plan on living a nice, long life).  And between both groups we have the issues with Debt to Asset ratios.

If you currently contribute to your 401k, IRA, have an emergency fund, and your assets equal a higher dollar value than your debt, then you are on a fairly good path and keep it up.  But the majority are not, and these people need to look into these options.  Whether you are working and 25 or 55, if your employer matches 401k or IRA contributions, take them, it’s free money.  If you don’t have an emergency savings fund for events that may come up, regardless of how great your credit available is, build one, I like to use six months of total expenses as a general rule of thumb in a high yield savings account.  Do you even have a high yield savings account?  If not, create one, send me a message at cinder@socialmarginal.com with your name and email and I’ll be happy to send you a code that will allow you to get a free $25 with a minimum of $250 opening deposit (ING is where I keep my personal savings and have had no problems with it), but there are many other banks and do research regarding the entire company rather than just the rate they offer before you decide on one to utilize.

Not many younger people realize how much money they’ll accrue over 20-50 years if they can just afford to contribute $25-$50 a week or even month to a high yield savings account with compound interest and all, do the math, you’d be surprised.  So if you’re still relatively young, you still have plenty of time to start building that future, but don’t wait (the earlier you start, the more you’ll have), do your research and do it now.  If you’re around 55 and still working, you still have opportunities to contribute to that will augment your social  security as well. 

If you’re 59+ and living off social security and no other auxilary income, well, hopefully you’re making it work, if not, try and find some alternate income that doesn’t add a lot of stress to you, like jobs working from home, and get at it (Sorry, not much advice on that one).

Not all that helpful, but there are a thousand articles (Google is your friend) that will explain what you ’should’ do and different opinions on it, this is just a reminder that if you’re not seriously planning for your future, you need to get off your butt and do it.  If you have a financial planning blog or article that you’d like to reference pertaining to this situation, please do submit it to the comments on this post for others to use.

First, let me start this off by saying that you shouldn’t be lending money to anyone unless it’s completely disposable income, as in, the sort of income you’d use to buy a video game or some such thing, not the income you’d use to feed yourself or pay your mortgage.  Regardless of the situation they are in, only give the shirt off your back if you can afford to buy another one for yourself, no matter how badly you feel for them.  If there is a friend or family member that ‘just needs to make rent for this month’ when you care barely afford to pay yours, help them out by researching their options and giving them valuable advice instead of the money from your pocket.

With that said, I have little reserve in lending money to friends or family, providing the right conditions are met, and that they have a financial plan set forth (which I am often happy to help them set up) to not get themselves in the situation again where they will need to borrow money.  Of course you also need to document the loan as you would any other, including reasonable (check with your state, but you shouldn’t be near the max anyways if you like your friends or family) late fees for missed payments on whatever payment schedule you have set forth to teach them that credit isn’t something to be taken lightly.  If you want to charge interest, do so, if you do so reasonably they will often be very happy with you (I’ll give a good example in a moment), charging Prime is usually a good benchmark, it’s more than you’d make in a high yield savings account and it’s a better rate than they’d get from any creditor, so you’re helping them out.  Ultimately though, along with your judgement, trust your gut when deciding whether to lend to them or not, it’s Ok to say No, even if they know you have the money, if you think they’ll pull something; just use that old line, “Sorry, never lend to friends or family.”

Next, know their financial situation and be realistic with the payback schedule and only loan to them if you can provide one reasonable to it.  If they need to set up monthly payments for a year to payback a $300 loan because they’re still putting away money for an emergency fund (go back to helping them with a financial plan) and that’s a reasonable payment their disposable income will allow, do so, you’ll have a high likelihood of getting it back.  And if they decide to stop making payments, don’t jump on them demanding collections, talk with them about why it’s happening and be reasonable, sometimes you may need to lower the payments and stretch them out over a longer period of time, and sometimes your loan has just become a gift (which goes back to only loaning disposable income).  Money is replaceable, good friends and family are not. 

However, if in a situation where they just decide not to pay you back per the terms of the contract when they are able to, don’t make threats, don’t play the drama game, just spend a couple bucks and file a small claims suit against them on day 61 (or whatever your contract stipulates).  Any friend who has such an attitude isn’t a friend, and any family member needs to be taught a lesson (family should act like family, and while I’m sure some will disagree, filing against them is the lesser of these two ‘transgressions’ concerning family).  Now, if you documented the loan, you’re pretty much guaranteed to get a settlement against them, the problem then with collecting on it varies by State, and perhaps you won’t even want to or care to.  The fact is that you taught them a lesson.  Maybe in time a friendship or the family relationship will heal, and maybe not, but that is a risk you take, fortunately my family would never do such a thing and I don’t make friends with people who wouldn’t do whatever they could to pay me back, so it would never be an issue (Thank God).

Now a good story to end this all.  One day I was walking in a Best Buy with a business associate and good friend of mine (we’re both self employed and I’d actually been helping him get his finance straight and such) and there was a laptop on sale that could benefit him for business, point being it wasn’t frivolous.  He says he’s going to buy it and pulls out a 24.99% interest credit card (eck, long story short, all of his credit cards are now locked in my safe).  I stop him rather abrubtly, knowing his finances that he could afford to pay it over a six month period, but also knowing the APR on that card.  So I offer to loan him the money at current prime (simple interest) under a six month repayment schedule, basically forcing him not to get into more irresponsible debt.  I buy the laptop, we head back to my place, I type up a contract with repayment terms, we both signs, and I hand him the laptop.  I even made a repayment schedule for him as well with due dates and the amount due in an easy to read spreadsheet.  Needless to say every due date there was a deposit in my bank account for the amount which he owed.  He paid it off, was thankful for the loan, I made more than I would of with the money sitting in a high yield savings account, and all are happy (by chance, he’s also going to be the Best Man at my wedding).  Ok, end of happy bunny rabbit example.  It wasn’t a “need” loan, but it wasn’t a frivolous one either and the same principles applied.

So, to sum it up, I think it’s Ok to loan to Friends and Family.  Just make sure you are only loaning disposable income of yours, you get everything in writing signed by both parties, you help them make sure they’ll not need a loan like that again and make sure that they’re on a repayment schedule they can actually afford without sacrificing too much, and, of course, that you truly trust them.  Chances are it’ll turn out Ok, whether or not you actually get your money back.

However, with all that said, I’d much rather give the money as a gift if the person is truly in need rather than a loan, providing they are willing to open up ‘their books’ and let me help them with their financial planning and getting on the right track.  I just think it’s a better choice and you’re giving them a much more valuable gift by helping them set their finances straight, and as it’s all disposable income, you can afford it.

I’m not one of those Ron Paul zealots (though he does have a lot of great ideas, I just don’t believe he’d ever be a viable President), nor am I a Bernanke “hater”, but in this address to the Fed Chairman, Ron Paul really summed up what’s been bugging me about his current actions.  Sorry for the YouTube link, I’m not a big fan of video links in blogs either.

I try to keep everything here on a lighter and more personal mood (though this is very personal and directly affects your finances), but I am known to be a closet economist at times. So ok, I’m done now, I’ll go back to my normal blogging topics, heh. Well, at least once I can think of something to write about that are ON topic.

It’s an age-old adage, but one that is often forgotten in these days of instant credit and zero percent financing.  People on low salaries constantly running up bills that they can not afford to pay off and end up needing to be bailed out in one way or another in the end.  Before you read this brief excerpt, realize that I am no Ramseyite.  I don’t believe that one must strive to live without debt (though it is, of course, nice), what I do believe is that people should strive to live only with responsible debt.

Responsible debt is a hard thing to define, and something that, of course, differs from person to person, if there is a set formula for figuring it out then please feel free to comment and share it.  However, I loosely classify it as being able to pay off all your debt sans mortgage within a one-year period under normal circumstances and without the need to drain your emergency cash reserves, retirement, or standard savings.  Of course this means that you should always take advantage of products such as zero percent financing deals and the like that ultimately benefit you, as they are very often purely responsible debt if handled correctly.  Say you purchase a $4,000 television and they offer 12 months interest free.  Well, you can buy the television on their credit and then bank the $4,000 in a C.D. or whatever and then cash out the C.D., pay for the television and pocket the interest earned on the “holding” account.  That extra 3.4% or so that you can earn on that money over the year (or hopefully multiple years) adds up, just as long as you have a plan to pay off that debt before the promotion expires and you’re suddenly hit with all the retroactive financing charges.  Play the system, but play it responsibly. Read the fine print, ask questions, be sure you understand the terms of the deferred interest “0%” interest plan that is being talked-up to you. You must keep in mind that it is the goal of the seller to move his product and make as much money doing it as is possible.

Responsible debt requires responsible financial planning, and if you don’t have it, you can’t afford any debt.