Wannabe High Roller

Monthly Payment Hell

7 mins

More than ever luxury goods are being sold to the masses who before shied away from posh products as being “too expensive”. It’s easier than ever to own a £40k Mercedes Benz or £1000 top of the range smartphone.

"monthly payments render a wannabee “high rollers” conscious mind incapable of realising the reality"

Monthly or weekly payments are nothing new. Indeed, my dad used to pay the Man from the Pru each month, regular as clockwork. As a child I would gaze at the Freemans or Littlewoods catalogues looking at bikes that were priced with weekly payments, wondering how I could convince my dad to agree with the purchase. He never did. Too bloody expensive he said. He was right.

But I am not talking about essentials like clothes or white goods, I am talking about luxury goods once the purview of the rich, of the famous, celebrities and the endowed. As we are all “special” now within this “classless” society, we want the trappings of being special to, to treat ourselves. Justifying it with common sense reasoning “Let face it we aren’t getting any younger “or that old chestnut “we can’t take it with us”. We want wants due to us by right. We want the “high roller” lifestyle. Not just for the afternoon, but forever. After all “we could be dead tomorrow”.

But being a “high roller” tends to satisfy a certain sort of person who incidentally aren’t typically the rich or famous. These wannabe “high rollers” live on a new’ish housing estates on middle incomes and send their kids to the local comprehensive. The aspiring “high rollers” are financial Walter Mitty’s who seek better than their lot in life and want to be seen doing it too. In the meantime big “nasty” business is exploiting this social vacuum with ways & means to flog previously unattainable goods with the use of monthly payments.

If you make £40k in a year you can easily get a brand new £40k Mercedes for £500 a month. How can that be? Monthly payments that’s what. You may not be able to afford the car without saving for many years, but you could now afford the monthly payment. But should you?

Monthly payments are evil and angelic depending on your point of view. Monthly payments render a wannabee “high rollers” conscious mind incapable of realising the reality.

Is it a good idea to spend a year’s salary on a bloody car? Especially when you have other important payment to make like a mortgage or rent, food, holidays and clothes.

“Yeah, but it’s not a year’s salary is it”, they say “Its only £500 a month. That not 40k. I think I can stretch if we increase the mortgage term to 35 years. Strike while the iron is hot…right?”

And of course, you will need to be seen with the latest smartphone stepping out of your shiny new Merc. But dropping £1000 on a phone is crazy, right? Much better to pay £50 a month cos I can afford that.

The thing is you probably can’t afford it.

Monthly payments cause a sort of myopia that frankly baffles me. I can’t quite get my head around it, because I know that monthly payments for anything is usually a really bad idea. Sure, you need to pay your mortgage and utilities monthly but everything else usually works out best when you pay it all at once, no monthly payments.

Some things like cars you have to buy on monthly payments, but in the olden days you negotiated the price and begged the finance company to offer you credit. They told you how much you could borough and at the end of the term the car was yours, to sell on if you wished.

No doubt some marketing boffin with a PhD figured that masking the real price of a product made it more attainable and therefore desirable. Big business loved this as the most profitable products are usually the most expensive.

Monthly payments are frankly a risk. If you have tied up your whole monthly salary into monthly payments and you experience an emergency, you have no room to manoeuvre without incurring costs here there and everywhere.    Costs which you can’t pay cos…well you get the picture.

Monthly costs for luxury items tend to be such bad value too. You’ll certainly pay a high interest rate, and there might be clauses to trip you up so you pay even more.

Paying for luxury goods on monthly payments is certainly contributing to the rising crisis of personal debt in the UK. The Bank of England recently telling banks, credit card companies and car loan providers to clean up their act, as they risk legal action against reckless lending.

So, take a tip for a happier financial life. Buy only what you can afford. Purchase as little as you can on monthly payments. Forget the zen philosophy cos you won’t die today but you will have to pay tomorrow.

Last updated on: 27 Sep 2017 03:59 PM

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