[Adam]

Here's something else to consider about Annie's story... You will save a lot more money by 'paying' for something before you buy it...

Let's take a cheap car as an example... If it costs $12,000 with all of the options that you want, etc., then you can save $1,000 each month, and own it in a year... If that's too steep, you could save $500 per month and own it in two years... or, since you're getting a cheap car, so your finances really aren't that great to begin with, you could put $334 in a bank each month and own the car in 3 years. You won't be able to drive it while you're saving up the money, but that 12,000 car will only cost you 12,000 dollars, and you never have to worry about missing a payment. You're also earning more money, because the interest on your savings account will add up to a pretty fair amount.

If you finance the car, though, especially if it is your first new car, you might end up paying $365 per month for that $12,000 car for a total of four years...

Let's do the math here... The car is worth $12,000... $365 * 12 * 4 = $17,520... Where did that extra $5,520 come from? Instead of getting paid for saving up for a car, you're paying out of the nose for the privilege to drive the car three years early... You also have to worry about losing the car if you miss payments as well.

So, saving up for a car will save you a lot of money compared to financing it... (Having good credit, unlike what I had when I bought the car in this example also helps a lot, if you absolutely *must* finance.)

Decide what you want first, get an accurate price, then pretend like you're making payments on it before you buy it... It will save you a lot of stress and money, which lets you get more 'stuff' than those people who are so addicted to 'stuff' that they spend the rest of their natural lifetimes trying to afford what they've already bought.