Buy Now, Pay Later | The ADHD Money Trap Disguised as Convenience | 89

4 payments of $25 that's not bad but one of the the trap is is it feels like it's no interest for now. It feels like it's affordable but it is still debt. So buy now, pay laters have become more and more popular, and I think one of the things that makes them so appealing is that it feels like it's like budgeting, right? Hey there, I'm Jules the budget nerd and welcome to the Debt Rebel show. This is the place where working families like yours learn how to stop living paycheck to paycheck, crush debt for good, and build a life where money actually works for your family.

In about 15 minutes, I'll share practical family budgeting tips, tough love strategies, and actionable steps to move toward debt free living without the fluff, the shame, or the confusion. And I know a thing or two about this. My family and I have eliminated over $107,000 in consumer debt, and that was after I got my degree in economics. So stay tuned. This is going to be a great episode. So grab that coffee, your planner, whatever you need to make this a great experience, maybe a snack if you're like me and let's make your money work for your family.

So buy now pay laters have become more and more popular. And I think one of the things that makes them so appealing is that it feels like it's like budgeting, right? Because we're making smaller payments. So it feels like it's more affordable, whatever it is that we're buying. And so you're like 04 payments, 25 bucks, you know, $100, right? Four payments of $25. That's not bad, but one of the the trap is is it feels like it's no interest for now. It feels like it's affordable but it is still debt.

The thing is you are setting up your future self for more, more problems, right? So it is more things to think about. It's more stuff to keep track of or not keep track of. And then it starts coming out of your bank account and you're like just scrambling, right, because you forgot about it. So it's just like this, this, this, we can stack these things on top of each other. And so then it becomes just like making one other large payment maybe to a credit card or something like that. So it feels good.

And the thing about that is, is retailers and marketers know that. That's why that was created, because this is a way of delegating your personal budgeting. The reason why I don't advise it and I don't think that you should do it is because it is. It's just kicking the can further down the road and setting yourself up for failure. And so when my husband and I had our huge amount of debt, this wasn't one of the things that we did. But it's basically like, it's kind of like a credit card, but it's not because they're not doing credit checks and they're not, there's no, there's no application fee or anything like there's nothing.

They're just taking, you know, if you do 20 for the $100 example, they're taking $25.00 / 4 four payments out of your account. And so one thing that you can do when we're going to talk about this in a minute is how you can still buy the thing and accomplish that goal without using the buy not pay later. So let's talk about what the hidden costs are of using buy Not pay later. Because everyone will talk about like marketers and retailers will talk about the things that are really good about it and the benefits for you.

But they will not talk about these things because one, they don't want you to know about them because then it will discourage you from using them, right? So I'm here to say, hey, is like you're, you know, older sister who's been through all of this stuff and sees things for what they are. And when it comes to your finances, this is 1 area. Do not, do not do this, OK? And it can completely derail your finances because it can add up very quickly. So some of the hidden costs that we that aren't talked about openly are the late fees.

Some of them those can rack up really quickly. So instead of having say, for instance, on a credit card, you have a balance and they charge you one late fee. But if you have 10 of these buy now pay laters and you have a late fee on one of those, boom. But if you have them on 10 of them, Oh my gosh, talk about that runaway freight train, right? Then enter in overdraft fees. Because if they try and take that out and you don't have the money in there, then you have overdraft fees on top of it, right?

Then there is that impulse buy feel. It increases that because retailers know, hey, I can buy this now for $25 today. It's really cost me $100 over time, but $25 sounds more manageable when I look at my bank balance right now, right? So then you're going to buy that versus looking at your decision and saying, is this something that I absolutely need? Is it intentional spending? I feeding an impulse? Am I looking for that dopamine hit? Does this line up with what my family has planned for our spending for the month?

It it's it increases that odd. It increases the odds of those impulse buys. Everything is it will just put your budget into chaos. So if you if those buy not pay laters aren't accounted for in your budget and they come out, then that's just going to derail your whole budget. It's going to derail the progress, but it's also going to eat away at the way that you feel about your money and the way that you spend it. All right. And another thing is there's an emotional cost in this. And so there is those, you know, like the always that feeling like, Oh gosh, is that again about to come out now?

Is that about to come out now? And not being able to track those things and having, having those come out and the anxiety of looking at your bank account going, Oh, that's right. That came out because that, you know, it's due this week. And you know, I, I space that out over a certain amount of time, but I can't remember because I did this other thing and it's just eating away at a lot of our mental capacities. And so that's why it's much better to just buy the thing when you buy it, But it is much better to when you buy an item is pay for it then.

And so that's what this whole podcast is about is not using credit and this is credit buy now, pay laters are credit. They are not marketed that way because marketers and retailers know that if we just make it, if we kind of, you know, shine it up and make it a little bit, if we present it a different way, then it's not going to be as painful because it's going to a but it's still going to affect us the same way. So another thing is it will sabotage those long term goals. So it gradually will eat at that cash flow, which is where which is your most valuable financial asset.

So when I talk about cash flow, that is the money that's coming in and the money that's going out is that that money that you have to spend, That's your cash flow. So that's where you know, for lack of a better term, that's where the money is, right? I'm literally because we are spending our money that comes into our household and we're getting every single, every single dollar that comes into our household a name. And so whether that's paying off debt, if it's savings, if it's our kids, extracurricular activities, if it's groceries, that kind of stuff, every single bit.

And so when we do those buy not pay laters, they gradually eat away at that cash flow. And so we can sabotage those long term goals by doing that. So it also helps condition your brain to normalize debt as a way of life. I absolutely think that there's another way to do life. It doesn't. And and debt doesn't have to be the way that you do it. The other thing about the buy now pay laters is it keeps families living paycheck to paycheck even when you're making decent money. And so this is like, if I could sum up what I do, this is it right here because I hear this all the time.

I'm living paycheck to pay, but I make good money or I make decent money or have a good job. This is where these little marketing tactics, the buy now pay laters can really sabotage and eat away at your family's income but your goals. So this is how you can get into that paycheck to paycheck cycle or you can stay in that paycheck to paycheck cycle. So now we know like the hidden cost, we know what buy now pay later is all about and who's you know who benefits from it. Spoiler obviously, right? It's not you.

So what do you do? OK, so if you're in this cycle, what do you do? How do you break out of it? So First off is, and this goes for all types of debt is just stop opening new new payment plans, stop opening credit cards, but the buy now pay later, stop opening new payment plans, not step number one. Then step number 2 is looking at all of those buy now, pay later payments that you have set up. OK, this might take a little bit of effort, but list them all out and then add those to your budget every single month, whatever it is.

So if those are paid on a weekly basis, make sure that you have the total amount for the month added into your every dollar budget or your spreadsheet or whatever you use to to budget your money is add those in there and then you're going to start knocking them out like there are many snowball. Just get those going as fast as possible. Whatever that smallest one is, knock it out and then move on to the next one. So you're going to list those out by smallest to largest balances. And then that first one, any extra money that you have from budgeting is make sure that you put that towards that smallest amount while you're paying the minimum amount on each of the rest of them.

Then the next step is, and this is what I'm going to talk about this in a future episode, but about affordability. If you can't afford to buy it right now for the price that it's listed for, you cannot afford to buy it. So if you, if you don't have the money to say, for instance, you bought that $100 item and you previously would have used the buy, not pay later, you know, $25 a week. If you can't buy it for $100 right now, don't buy it. It means you can't afford it. So I'm going to talk about affordability in a future episode because I think that that's such a interesting term that we throw around a lot, but I think it can be misunderstood.

So stay tuned for that. So what are some things that you can do once, OK, so you've got you broke out of that by now pay later cycle and then what can you do to avoid that? So here are some ways that you can accomplish that goal. I like to say accomplish that goal for less effort, maybe less money. That's always a win, right? So creating sinking funds, and this is really great, especially for like holiday spending or regular expenses that come up but aren't necessarily on a specific timeline. Well, I mean, for instance, like my family has a sinking fund set up for our next car because we don't know when we're going to purchase that, but we have money that we're saving towards every single month and we put it in a bank account and that's what that sinking fund is about.

So it is for things like that, you would normally have spent buy now, pay later money on that. You will set up and have a separate account if that works for you. I like to keep them separated so it doesn't come out of our bills on a regular basis. So we have one set up for the item that we're saving for. So especially for like holiday spending, that kind of stuff, we have, you know, like I said, for a new car, a new to US car, that kind of stuff. And then another thing you could do is if this is an area where you that impulse buy comes in and you're like, I want that.

And so it's just you normally would have gone to the buy not pay later option is set in your budget. A the line item, fun money. You can call it whatever you want. I have clients call it all kinds of things. My mom growing up called it mad money. But set a realistic amount in there that you would spend. So maybe look back at what your normal, maybe what your last, you know, 5 or 10 buy now pay laters were, look at what those items are and then add that to your monthly budget. And then look and see are those a couple other things are recognizing some patterns with that within those buy now pay laters.

Is it you're buying those things at a certain time of the day. So maybe you're wake up in the middle of the night like most of us do and you have your phone next to you. If that's the case, then maybe you need to create some boundaries there to help you with that. The other thing is if it's a specific time where you're just like stressed or you're bored or whatever is recognizing the feelings and the emotions behind some of those purchases and then creating a plan with to work through those. The other thing is to think about the price per use instead of payment per week thinking, OK, say for instance, you're you're the item that you're purchasing that you normally would purchase on the buy now, pay later was a sweater.

So one of my personal things is I don't like to make financial commitments in the future unless I know that I can follow through with them. And the only way I know that I can follow through with them is if they're in my budget, right? So if it's not written down in my budget, it doesn't happen. So this is a this is a common thought among among people, especially if they're living debt free lifestyles is and money, money wise thinking is thinking about how often you're going to use the item and and purchase it based on the amount, like the number of uses you're going to get out of it.

Instead of the payment per week for installments of something that's a sweater that maybe you're going to wear a few times, right? Think about how how you're going to use the item and then decide, OK, so the sweater is $100. Normally if you're using the buy not pay later method, you would be spending $25 each week on this sweater, right? But the way you want to think about it is the total amount is every single time I wear it. If you wear the sweater one time, it cost you $100. If you wear the sweater twice, then that's $50 per use.

And then if you wear it four times, that's when it comes in at $25. And so thinking about if the thing I'm about to buy, is it worth the amount that I'm going to be using it. So this is an obviously this kind of comes into things that you're going to be using on a regular basis. Yes, there are going to be times where you're going to splurge on something that you're only going to wear once, Hello, wedding dresses, that kind of stuff. But what do you do on a regular basis when it comes to these buy, not pay laters and you're tempted with those is thinking through is this actually, is this item worth what I'm about to pay for it And spreading it out is not the best option.

So if you're listening to all this and you're like, I have fallen into this trap before, but I don't want to keep doing this and I want to get my money under control for 2026. I would love to invite you to be a part of something that we're doing here. And it's only available for my e-mail subscribers. So you got to make sure you jump into my e-mail and it's the 12 days of Christmas promo. There's going to be some really amazing stuff. There's going to be some great trainings, there's going to be some freebies, there's going to be tools that are going to help you get set up for 2026.

And so like I said, it's only available for my e-mail subscribers. So if you go to my website, debtrebelpodcast.com. So the cool thing about the Debt Rebel Starter Kit is it's totally free and it's going to get you into our e-mail community so I can share some more information with you about the 12 days of Christmas and you can finally say goodbye to buy now pay laters and put your money to work, work for you and what you want for your family in 2026. So let's recap a little bit because buy now pay laters are like the is debt wearing a super cute outfit.

OK, we're going to we're going to say goodbye to her. The buy now pay later, we're going to say goodbye to her. I want you to know that you are that it is absolutely possible in today's day and age to live without payments. And I want to show you how. And that's where that starter kit comes in is going to help you make the most use of your next paycheck and help you align your personal goals with your budget. And jump on that website, jump on my website at debtrebelpodcast.com and you can grab that starter kit and we will see you in the next episode.

Thank you for tuning into the Debt Rebel show today. Ready to take your family budgeting to the next level? Stop that paycheck to paycheck grind and start living debt free. Head over to my website debtrebelpodcast.com. That's DEBTREBEL podcast.com to grab resources, tools and tips to make it happen. And don't forget, subscribe, leave a review. And if you know another family that will love hearing today's episode, it would be such a gift for both of us, your friend and me. If you share this episode and remember your debt free life starts with one brave step and I'm cheering you on every step of the way.

We'll talk soon. Debt Rebel.

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