5. Under which of the following circumstances would it be financially beneficial to you to borrow money to buy something now and repay it with future income?
a.) When you need to buy a car to get a much better paying job. As much as this answer seems the no-brainer, who among us hasn't borrowed money to take a vacation. Who among us hasn't whipped out credit card when faced with an obvious bargain, whether we could afford it or not. The last answer should not even be considered.
There is an old Italian adage that goes something like this: "You have to spend money to make money". If the car will enable you to work at a better job, the cost will be greatly offset by the increased income.
But first, explore all of the green options. Could you ride a bike, walk or take public transportation? These options keep money in your pocket and can be used for retirement funding rather than car payments. b.) When you really need a week vacation.
c.) When some clothes you like go on sale.
d.) When the interest on the loan is greater than the interest you get on your savings.
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