The buy it now pay it later (BNPL) revolution is here, and if you’re like most people, you’ve probably overspent on your zip and afterpays on your Christmas shopping and Boxing Day sales.
So let’s take a step back and kickstart 2019 with better habits and ensure that your purchases don’t get in the way of reaching your financial goals for the year.
A clean slate
If you haven’t done so already, now is the time to set realistic goals for the future, and you can’t do that without a review of your end of year spending habits.
Use Frollo to review your spending habits on Afterpay like services as well as other credit card purchases. (Remember to take into account future installments too!)
Update your Frollo budget paying close attention to your Lifestyle Expenses limit for the coming month.
Afterpays in moderation
In December last year, Scott Pape, The Barefoot Investor wrote: “Afterpay is the financial equivalent of marijuana”. He views it as a “gateway financial drug” which isn’t terrible in the short term but can be quickly addictive.
The convenience of these services has made it very easy to quickly accumulate multiple repayment plans from various providers.
And before you know it you’re struggling to make your credit card payments in the short term or save up for that holiday in the long term.
And the late fees can sting and in some cases using these services can hinder your chance of lenders give you a loan in the future.
So don’t get into bad habits, like all things in life, use these services in moderation, and keep things in line with your budget. If you have a bad month that’s OK, use Frollo to help recover in the next.
But, if your review already reveals you’ve binged too much and are hooked then try these tips:
– have the money equivalent of a “Dry January” and don’t use BNPL services for the rest of the month. Talk to your friends and make it a group goal to achieve together.
– many people use Afterpays for impulse buys which we can regret later – so if you’re feeling that impulse, save yourself the debt and sleep on that impulse buy before signing up to more repayments.
– use a debit card instead of adding to your credit card debt.
The buy-it-now-pay-later revolution is definitely here to stay and consumer advocates and governments are looking carefully at regulation to ensure consumers are protected. But the best regulation is getting yourself into good habits and as Scott puts it “check yourself before you wreck yourself”.