Credit Card

Paying in full may never be the best thing to do

When we see something we really like, there are a few approaches we can do to own it. For instance you want to buy this 42 inch SONY plasma High Definition TV. You can choose to either pay in full or pay by installment. Ideally we should pay in full because we can avoid paying the interest charges. However, most people ended up paying installments because they would prefer not to feel the pinch at that moment of purchase. As the saying goes, “With installment, I can buy many things at one go” But of course its economically not feasible.

However, we tend to mixed up this rationale between human relationships and economics. Let’s take chasing girls for example.

Part 1

• You met the girl of your penthouse fantasy and after much pursuing; you asked her out on a date. She agreed and you start brain storming where to take her out for dinner.
• You came out with this fancy restaurant idea and impressed her.
• Her birthday is in 2 weeks and you think of what is the best present to get for her.
• You bought her something really nice but ended up burning a hole in your pocket.
• But then again, she’s touched, so who cares!
• Finally, after all the perseverance, you got laid.

After 3 months.

Part 2

• You brought her to a food court.
• Buy her Mee Pok!
• She asked how come we so long never go eat restaurant.
• You reply: “You think I print money ah”
• She gives you one tight slap and stomped off.
• You realized you are in the wrong and buys something for her
• When she reaches her place, she asks you to go fly kite.

So what’s your damn point?

This is a simple illustration on what happens when we try to pay in full for relationships instead of paying by installments. Over impressing might in time turn against us because it’s hard to live up to expectations. Most of the time we tend to pay in full in other aspects besides monetarily. Acceding to all request, demands , going the extra mile, surprises might be beneficial in the short term, however once you reveal your last card, it might in time, turn against us.

Same goes for upbringing kids. If you buy everything whatever you kid wants, though you can afford it. Imagine what happens in the end. You kid becomes overly spoilt and demanding. Despite the fact that you very much want to satisfy your kid’s desires, acceding to all his requests might not be the best thing to do. In certain cases, it might be making up for what you lack in your younger days. For instance, you might be very poor in your younger days and you tell yourself that your kids must have this and that when they grow up. Unfortunately, the hunger to succeed would only apply to people who tasted hunger.

What should we do then?

Love, care and concern is a unlimited resource that we have that does not require any work or services in exchange for, compared to money, which is why we use it so freely. It is not necessary a bad thing because that’s how the term unconditional love comes about. But then again, anything that is moderate is healthy, and excessive, unhealthy. We might want to consider love as a resource that is limited and to quantify it. For instance, I have 5000 units of love.* This is how it works.

Love Financial Sheet

Debit

Assets

Money in Bank Account 3000 Units

Available free time 2000 Units

(After work and sleep deduction)

Credit

Liabilities 700 Units

Picks her up from work daily 600 Units

Brings her to an expensive restaurant 500 Units

Buy her a branded handbag 400 Units

Message her sweet nothings 300 Units

For saying and doing the wrong thing 2500 Units

5000 Units

We can see from this example that if we pay everything in full. Often we always find that we have nothing to lose if we accede to all, but in actual fact, we only regret when we lost everything. You might want to consider paying in installment instead of paying in full.

So why is everybody doing that?

The reason why credit card companies make so much money is because they market in such a way so that consumer would be encouraged to spend. With a higher spending power, customer can accumulate more points and redeem for free gifts. As for love units, what do u think can be redeemed for? For me to know and for you to find out!

This does not apply to everyone. Somehow some people have more love to spare I don’t know! You might want to pay in installment instead of paying in full.

* Disclaimer cause: The love financial statement is not conjunction to normal accounting practice in Singapore*