In a creative-type job, if you have an extra 15 minutes, that’s just play time.  It’s not enough time to start a project, because in 14 minutes, you would just be getting into your creative zone, then have to stop.  Frustrating!  While Jerod and I were waiting for a meeting start, he was shopping for an HDMI coupler and I was doing my social media stuff.  I heard Jerod laugh and say he was going to finance an HDMI coupler for 36 months.  Honestly, I didn’t heard a thing he said after, “…I’m going to finance…”  Jerod wouldn’t finance anything if his life depended on it.  Then I understood why he was laughing.  This thing he needs costs $16.99 and they offer financing plans.  Check it out.

So, with the other 13 minutes, he researched the financing terms.  He only has to pay 1% of the balance per month with an annual percentage rate of 25.24%.  This is a church item, so it would have no tax on it and the monthly payment would be $.17.  If you chose this plan, you would never be able to pay it off, as you would be accruing debt for the rest of your life.  

We know this because Jerod used a loan calculator and it wouldn’t work.  At that point, I decided to talk to Brenda.  She whipped out a spreadsheet in 22.34 seconds, saying the same thing, you can never pay it off.  You will actually accrue debt.  I could tell, Brenda likes this stuff too.  She’s one of us.

Back to Jerod… he figured if you pay $.37 per month, a little over 2% of the balance, you can pay it off in 44 years, interest totaling $169.86.  Okay, it’s fun to calculate, but maybe not to actually do for fun.

Now to me.  I wanted to know how much debt would be accrued on this plan.  Working all the original numbers, here’s the debt plan.  After 10 years, your balance will be $63.39.  After 25 years, your balance goes up quite a bit to $456.90.  After 50 years, you’ve blown a large chunk of your retirement at $12,287,59.  At 100 years, as you may not live that long, and you’ve left your kids $8,789,767.81 in debt.

Now Brenda is not reading this part, as she’s checking my numbers.  Probably not a bad idea since Excel is not my strong skill.  This is insanity.  And this happens in real life! I was listening to a financial talk show a few months ago and a girl called in about a credit card she had cancelled.  She had overpaid by $11.00, assuming the account had been closed and they didn’t send a check.  She thought for $11.00, it’s not worth the hour of time it would take to call and hassle with it.  After about 5 years, she got a collection letter for over $1,000.  The sad thing?  She’s liable for it.  She will spend days, not hours now, not to mention her credit score trying to take care of this.

As my son said today, after seeing a commercial about credit counseling, “Mom, these people on TV are protesting credit cards.  Credit card companies try to keep you in debt.  That’s just not right.  I’m never getting a credit card.”  I sure hope he holds on to that philosophy for the rest of his life.