4 payments of $25 that's not bad but one of the the trap is is it
feels like it's no interest for now.
It feels like it's affordable but it is still debt.
So buy now, pay laters have become more and more popular,
and I think one of the things that makes them so appealing is
that it feels like it's like budgeting, right?
Hey there, I'm Jules the budget nerd and welcome to the Debt
Rebel show. This is the place where working
families like yours learn how to stop living paycheck to
paycheck, crush debt for good, and build a life where money
actually works for your family. In about 15 minutes, I'll share
practical family budgeting tips, tough love strategies, and
actionable steps to move toward debt free living without the
fluff, the shame, or the confusion.
And I know a thing or two about this.
My family and I have eliminated over $107,000 in consumer debt,
and that was after I got my degree in economics.
So stay tuned. This is going to be a great
episode. So grab that coffee, your
planner, whatever you need to make this a great experience,
maybe a snack if you're like me and let's make your money work
for your family. So buy now pay laters have
become more and more popular. And I think one of the things
that makes them so appealing is that it feels like it's like
budgeting, right? Because we're making smaller
payments. So it feels like it's more
affordable, whatever it is that we're buying.
And so you're like 04 payments, 25 bucks, you know, $100, right?
Four payments of $25. That's not bad, but one of the
the trap is is it feels like it's no interest for now.
It feels like it's affordable but it is still debt.
The thing is you are setting up your future self for more, more
problems, right? So it is more things to think
about. It's more stuff to keep track of
or not keep track of. And then it starts coming out of
your bank account and you're like just scrambling, right,
because you forgot about it. So it's just like this, this,
this, we can stack these things on top of each other.
And so then it becomes just like making one other large payment
maybe to a credit card or something like that.
So it feels good. And the thing about that is, is
retailers and marketers know that.
That's why that was created, because this is a way of
delegating your personal budgeting.
The reason why I don't advise it and I don't think that you
should do it is because it is. It's just kicking the can
further down the road and setting yourself up for failure.
And so when my husband and I had our huge amount of debt, this
wasn't one of the things that we did.
But it's basically like, it's kind of like a credit card, but
it's not because they're not doing credit checks and they're
not, there's no, there's no application fee or anything like
there's nothing. They're just taking, you know,
if you do 20 for the $100 example, they're taking $25.00 /
4 four payments out of your account.
And so one thing that you can do when we're going to talk about
this in a minute is how you can still buy the thing and
accomplish that goal without using the buy not pay later.
So let's talk about what the hidden costs are of using buy
Not pay later. Because everyone will talk about
like marketers and retailers will talk about the things that
are really good about it and the benefits for you.
But they will not talk about these things because one, they
don't want you to know about them because then it will
discourage you from using them, right?
So I'm here to say, hey, is like you're, you know, older sister
who's been through all of this stuff and sees things for what
they are. And when it comes to your
finances, this is 1 area. Do not, do not do this, OK?
And it can completely derail your finances because it can add
up very quickly. So some of the hidden costs that
we that aren't talked about openly are the late fees.
Some of them those can rack up really quickly.
So instead of having say, for instance, on a credit card, you
have a balance and they charge you one late fee.
But if you have 10 of these buy now pay laters and you have a
late fee on one of those, boom. But if you have them on 10 of
them, Oh my gosh, talk about that runaway freight train,
right? Then enter in overdraft fees.
Because if they try and take that out and you don't have the
money in there, then you have overdraft fees on top of it,
right? Then there is that impulse buy
feel. It increases that because
retailers know, hey, I can buy this now for $25 today.
It's really cost me $100 over time, but $25 sounds more
manageable when I look at my bank balance right now, right?
So then you're going to buy that versus looking at your decision
and saying, is this something that I absolutely need?
Is it intentional spending? I feeding an impulse?
Am I looking for that dopamine hit?
Does this line up with what my family has planned for our
spending for the month? It it's it increases that odd.
It increases the odds of those impulse buys.
Everything is it will just put your budget into chaos.
So if you if those buy not pay laters aren't accounted for in
your budget and they come out, then that's just going to derail
your whole budget. It's going to derail the
progress, but it's also going to eat away at the way that you
feel about your money and the way that you spend it.
All right. And another thing is there's an
emotional cost in this. And so there is those, you know,
like the always that feeling like, Oh gosh, is that again
about to come out now? Is that about to come out now?
And not being able to track those things and having, having
those come out and the anxiety of looking at your bank account
going, Oh, that's right. That came out because that, you
know, it's due this week. And you know, I, I space that
out over a certain amount of time, but I can't remember
because I did this other thing and it's just eating away at a
lot of our mental capacities. And so that's why it's much
better to just buy the thing when you buy it, But it is much
better to when you buy an item is pay for it then.
And so that's what this whole podcast is about is not using
credit and this is credit buy now, pay laters are credit.
They are not marketed that way because marketers and retailers
know that if we just make it, if we kind of, you know, shine it
up and make it a little bit, if we present it a different way,
then it's not going to be as painful because it's going to a
but it's still going to affect us the same way.
So another thing is it will sabotage those long term goals.
So it gradually will eat at that cash flow, which is where which
is your most valuable financial asset.
So when I talk about cash flow, that is the money that's coming
in and the money that's going out is that that money that you
have to spend, That's your cash flow.
So that's where you know, for lack of a better term, that's
where the money is, right? I'm literally because we are
spending our money that comes into our household and we're
getting every single, every single dollar that comes into
our household a name. And so whether that's paying off
debt, if it's savings, if it's our kids, extracurricular
activities, if it's groceries, that kind of stuff, every single
bit. And so when we do those buy not
pay laters, they gradually eat away at that cash flow.
And so we can sabotage those long term goals by doing that.
So it also helps condition your brain to normalize debt as a way
of life. I absolutely think that there's
another way to do life. It doesn't.
And and debt doesn't have to be the way that you do it.
The other thing about the buy now pay laters is it keeps
families living paycheck to paycheck even when you're making
decent money. And so this is like, if I could
sum up what I do, this is it right here because I hear this
all the time. I'm living paycheck to pay, but
I make good money or I make decent money or have a good job.
This is where these little marketing tactics, the buy now
pay laters can really sabotage and eat away at your family's
income but your goals. So this is how you can get into
that paycheck to paycheck cycle or you can stay in that paycheck
to paycheck cycle. So now we know like the hidden
cost, we know what buy now pay later is all about and who's you
know who benefits from it. Spoiler obviously, right?
It's not you. So what do you do?
OK, so if you're in this cycle, what do you do?
How do you break out of it? So First off is, and this goes
for all types of debt is just stop opening new new payment
plans, stop opening credit cards, but the buy now pay
later, stop opening new payment plans, not step number one.
Then step number 2 is looking at all of those buy now, pay later
payments that you have set up. OK, this might take a little bit
of effort, but list them all out and then add those to your
budget every single month, whatever it is.
So if those are paid on a weekly basis, make sure that you have
the total amount for the month added into your every dollar
budget or your spreadsheet or whatever you use to to budget
your money is add those in there and then you're going to start
knocking them out like there are many snowball.
Just get those going as fast as possible.
Whatever that smallest one is, knock it out and then move on to
the next one. So you're going to list those
out by smallest to largest balances.
And then that first one, any extra money that you have from
budgeting is make sure that you put that towards that smallest
amount while you're paying the minimum amount on each of the
rest of them. Then the next step is, and this
is what I'm going to talk about this in a future episode, but
about affordability. If you can't afford to buy it
right now for the price that it's listed for, you cannot
afford to buy it. So if you, if you don't have the
money to say, for instance, you bought that $100 item and you
previously would have used the buy, not pay later, you know,
$25 a week. If you can't buy it for $100
right now, don't buy it. It means you can't afford it.
So I'm going to talk about affordability in a future
episode because I think that that's such a interesting term
that we throw around a lot, but I think it can be misunderstood.
So stay tuned for that. So what are some things that you
can do once, OK, so you've got you broke out of that by now pay
later cycle and then what can you do to avoid that?
So here are some ways that you can accomplish that goal.
I like to say accomplish that goal for less effort, maybe less
money. That's always a win, right?
So creating sinking funds, and this is really great, especially
for like holiday spending or regular expenses that come up
but aren't necessarily on a specific timeline.
Well, I mean, for instance, like my family has a sinking fund set
up for our next car because we don't know when we're going to
purchase that, but we have money that we're saving towards every
single month and we put it in a bank account and that's what
that sinking fund is about. So it is for things like that,
you would normally have spent buy now, pay later money on
that. You will set up and have a
separate account if that works for you.
I like to keep them separated so it doesn't come out of our bills
on a regular basis. So we have one set up for the
item that we're saving for. So especially for like holiday
spending, that kind of stuff, we have, you know, like I said, for
a new car, a new to US car, that kind of stuff.
And then another thing you could do is if this is an area where
you that impulse buy comes in and you're like, I want that.
And so it's just you normally would have gone to the buy not
pay later option is set in your budget.
A the line item, fun money. You can call it whatever you
want. I have clients call it all kinds
of things. My mom growing up called it mad
money. But set a realistic amount in
there that you would spend. So maybe look back at what your
normal, maybe what your last, you know, 5 or 10 buy now pay
laters were, look at what those items are and then add that to
your monthly budget. And then look and see are those
a couple other things are recognizing some patterns with
that within those buy now pay laters.
Is it you're buying those things at a certain time of the day.
So maybe you're wake up in the middle of the night like most of
us do and you have your phone next to you.
If that's the case, then maybe you need to create some
boundaries there to help you with that.
The other thing is if it's a specific time where you're just
like stressed or you're bored or whatever is recognizing the
feelings and the emotions behind some of those purchases and then
creating a plan with to work through those.
The other thing is to think about the price per use instead
of payment per week thinking, OK, say for instance, you're
you're the item that you're purchasing that you normally
would purchase on the buy now, pay later was a sweater.
So one of my personal things is I don't like to make financial
commitments in the future unless I know that I can follow through
with them. And the only way I know that I
can follow through with them is if they're in my budget, right?
So if it's not written down in my budget, it doesn't happen.
So this is a this is a common thought among among people,
especially if they're living debt free lifestyles is and
money, money wise thinking is thinking about how often you're
going to use the item and and purchase it based on the amount,
like the number of uses you're going to get out of it.
Instead of the payment per week for installments of something
that's a sweater that maybe you're going to wear a few
times, right? Think about how how you're going
to use the item and then decide, OK, so the sweater is $100.
Normally if you're using the buy not pay later method, you would
be spending $25 each week on this sweater, right?
But the way you want to think about it is the total amount is
every single time I wear it. If you wear the sweater one
time, it cost you $100. If you wear the sweater twice,
then that's $50 per use. And then if you wear it four
times, that's when it comes in at $25.
And so thinking about if the thing I'm about to buy, is it
worth the amount that I'm going to be using it.
So this is an obviously this kind of comes into things that
you're going to be using on a regular basis.
Yes, there are going to be times where you're going to splurge on
something that you're only going to wear once, Hello, wedding
dresses, that kind of stuff. But what do you do on a regular
basis when it comes to these buy, not pay laters and you're
tempted with those is thinking through is this actually, is
this item worth what I'm about to pay for it And spreading it
out is not the best option. So if you're listening to all
this and you're like, I have fallen into this trap before,
but I don't want to keep doing this and I want to get my money
under control for 2026. I would love to invite you to be
a part of something that we're doing here.
And it's only available for my e-mail subscribers.
So you got to make sure you jump into my e-mail and it's the 12
days of Christmas promo. There's going to be some really
amazing stuff. There's going to be some great
trainings, there's going to be some freebies, there's going to
be tools that are going to help you get set up for 2026.
And so like I said, it's only available for my e-mail
subscribers. So if you go to my website,
debtrebelpodcast.com. So the cool thing about the Debt
Rebel Starter Kit is it's totally free and it's going to
get you into our e-mail community so I can share some
more information with you about the 12 days of Christmas and you
can finally say goodbye to buy now pay laters and put your
money to work, work for you and what you want for your family in
2026. So let's recap a little bit
because buy now pay laters are like the is debt wearing a super
cute outfit. OK, we're going to we're going
to say goodbye to her. The buy now pay later, we're
going to say goodbye to her. I want you to know that you are
that it is absolutely possible in today's day and age to live
without payments. And I want to show you how.
And that's where that starter kit comes in is going to help
you make the most use of your next paycheck and help you align
your personal goals with your budget.
And jump on that website, jump on my website at
debtrebelpodcast.com and you can grab that starter kit and we
will see you in the next episode.
Thank you for tuning into the Debt Rebel show today.
Ready to take your family budgeting to the next level?
Stop that paycheck to paycheck grind and start living debt
free. Head over to my website
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We'll talk soon. Debt Rebel.