Pay Now, Buy Later – SmartyPig

Tired of paying installments on unnecessary purchases? Control your spending by using SmartyPig, an online system that tells you how much you need to spend each month for a thing you want to purchase.

Retailers very rarely entice us to pay for something now and enjoy it later. How would you react when marvelling over a crisp picture and wonderful sound, for example, if the store clerk sidled up to you and said ‘go on, delay the gratification’¦just give us a little bit of money on a regular basis, and you can pick it up in six months!’.

The simple fact is we have been hardwired to want and get stuff now – and worry about the details later. And doesn’t it show? According to the Reserve Bank of Australia;

”¦over the last 18 years the total amount of debt owed by Australian households rose almost six-fold. At September 1990 the level of household debt was almost $190 billion, increasing to around $1.1 trillion by September 2008 in real terms (i.e. adjusted to remove the effect of inflation).’

Woah! Almost every Australian then probably knows the feeling of having to make some sort of repayment on an indulgent, unnecessary purchase.

Despite this trend, many people will be familiar with the antiquated notion of lay-by. It seems that the idea of waiting for what you want is outdated. But as one of our team member’s dads used to say: ‘if you want it so badly, isn’t it worth waiting for?’

Imagine a world where your lay-by had no time or value limit and you got paid interest on your payments. Better yet, when you finished paying off your item, not only did you collect it guilt free, but the retailer threw in something to reward you for your efforts.

This is essentially what SmartyPig (www.smartypig.com.au) offers. You choose what you want and when you want it by, and SmartyPig will tell you how much you’ll need to put aside each month to make it happen. Your money is securely held with ANZ, you get paid interest along the way, and you have the ability to share your goal with friends and family via networks like Facebook and MySpace. Perhaps best of all, when you have enough money to get what you want, you can choose to take the money as a gift card with one of SmartyPig’s retail partners and be rewarded with an added percentage on top of the amount you’ve put aside.

If you’ve already done the damage and slugged an indulgence or three on your card, SmartyPig can also help you reverse your way out of your ‘buy now, pay later’ lifestyle. Simply set up a goal that is equal to a portion of your credit card debt. If you have more than one card with a balance that carries over from month to month, set your sights on eliminating the balance on the highest interest card. Play with the dates in SmartyPig until you find monthly contributions that are manageable.

Treat the SmartyPig contribution like you would a repayment – that is, non-negotiable. Because you can’t withdraw the money from your SmartyPig goal without admitting defeat (that is, prematurely stopping the goal) you’ll suffer far less temptation to spend your savings. Then, when your goal is finished and you’ve got the money to pay off your card, consider reducing your credit card limit to a lower amount to prevent you from racking up the balance again.

Now we know what you’re thinking’¦if you put this amount on your credit card each month instead of in a SmartyPig goal, you’d save money on interest. This is quite true. But if the temptation of having available credit has proven too much for you before, chances are it will again. Using the SmartyPig system for paying off your credit cards significantly minimises the risk that you’ll make the same mistake twice!

To read more from the SmartyPig team, visit our blog at http://blog.smartypig.com.au. We also give away gift cards on the third Friday of each month via Twitter (www.twitter.com/smartypigau) which will help you get the things you want and pay that credit card debt off quick smart.

We hope to see you soon,

Team SmartyPig

This article was a guest post from Team SmartyPig. To find out more, visit the SmartyPig website. Alternatively, you can register for an account to start saving towards your goals now!

Image source: rosscrawford1

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