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Paying For Your Phone WIth A Plan

talessi@ariesfoundation.org

EVEN A LITTLE DEBT ADDS UP QUICKLY...

BUYING YOUR PHONE ON A PAYMENT PLAN

When you buy your phone on a paymnet plan you are putting yourself in debt. Let's say you buy a $1,000 phone and you paid the tax upfront, you now owe $1,000, even if that's split up over 24 months. And for fun, let's say last year you bought the new iPhone 11 Pro for $1000 on a plan and it's only 42 dollars a month. Now the newe iPhone 12 is here and your provider has a trade-in program where you could trade in your newest phone and get the latest and greatest phone and keep the same payment plan. And you've been doing this year, over year, over year, and you know what happens? You never end up owning any of these phones. You're just borrowing them or renting them, and every single time you literally get no value out of the phone. so you pay for twelve months you put half the phones value and then you trade it in and you get the next phone or you trade it in you get a credit towards the next phone but you never own the phone at no point have you paid the phone off and this is inherently the problem 

See whenever you are buying things using credit cards or payment plans the mindset is usually,  I'll pay it off eventually. But you are not thinking about it in the best way. If you thought about things in terms of the way that businesses do, then anything that does not appreciate in value is considered a loss of income, or bad debt. So when you buy a phone for $1000 and the next year it is now only worth $400 or $500, then you've paid all this money and you actually lost money.  When you invest in depreciating assets like a phone, or a tablet, or a computer you invest your money in something that's depreciating. Now I know we all use mobile phones and computers to make money, but we don't need the newest gadget to do that. An iphone 10 does the job the same as an iphone 12. 

If you had just kept your phone instead and had no payment, you would just have your monthly bill to pay for using the cellphone service. Which woul also mean that you did not have the extra $42 a month payment for your new phone. Wouldn't that be wonderful! Imagine what you could do or pay off wiht that extra money each month. This starts the trend for us. If we can nip it here, then we can move on and tackle other types of debts that we accrue.  See while we think we are gaining more stuff in our lives, what we are actually doing is putting ourselves deeper in debt. In our opinion the right way to grow your wealth is being patient and buying things with cash. Don't put down  the bare minimum and carry a large debt balance...So you have to drive an older model car, or not have the newest and shiniest cell phone, or move into a smaller home until you can afford a larger one. The best way to do any of this buying is to save up and be able to either A) Pay Cash or B) Put down a large deposit (more than 50%) it will go a long way to helping you lead a less stressful (at least from a financial point of view) life. Maybe even declutter your life a little. Think about it. How much money you owe other people, how many times you've bought stuff on credit, or went into debt over a materialstic thing? 

And maybe, just maybe, you may find that haveing less stuff isn't such a bad thing. That maybe it can be a positive thing.  Because if we really look at our lives and how we are living, sometimes we are trying to compensate or make up for things just by buying stuff...But are you really happy? you need to answer that question for yourself, but I say is don't use debt, or set aside funds in your budget so that you can afford it. There is a very simple rule to follow: if you don't have the money today, and you have to use a credit card to afford it, then don't buy it. Have patience and wait. Build us some savings or a down payment and then buy it, even if it is last year's iphone.

Got Questions? Ask Us. We Can Help WIth That!
ARIES FOundation for FInancial Education, Inc is a nonprofit dedicated to the mission to help everyone have a better relationship with their money. Vist our site www.ariesfoundation.org to learn more about what we do. 

By Thomas Alessi January 5, 2025
Have you ever noticed how New Year's resolutions seem to lose their sparkle by the second or third week of January? If so, you’re not alone. Statistics show that most people abandon their resolutions within a few weeks of setting them. But why does this happen? The reasons often lie in how we approach our goals and the mindset we carry into the new year. One of the biggest culprits is setting unrealistic goals. Many of us feel a surge of motivation on January 1st and decide to aim for major life changes all at once—like losing 30 pounds in a month or working out every single day without fail. While ambition is admirable, these types of goals are often unattainable in such a short period, leading to frustration and eventual burnout. Another common issue is the lack of a clear plan. Resolutions often start as vague statements like “I want to get fit” or “I’ll save money this year.” Without actionable steps or measurable milestones, it’s easy to lose track of progress or get overwhelmed by the enormity of the goal. Without structure, even the best intentions can falter. Motivation fades quickly after the excitement of the new year dies down. Motivation is often fueled by novelty, but real change requires discipline and consistency—two traits that are harder to maintain over time. By mid-January, the initial enthusiasm often gives way to old habits, especially if we don’t have systems in place to reinforce new ones. Social and environmental pressures also play a role. Life gets busy, and as the demands of work, school, or family creep back in after the holiday lull, resolutions take a backseat. Pair this with temptations like junk food or the comfort of skipping the gym, and it’s no surprise that many people give up. Finally, many people don’t account for setbacks. Whether it’s missing a workout, overspending on a shopping trip, or indulging in an unhealthy meal, one slip-up can feel like a failure. This "all-or-nothing" mindset often leads to abandoning the resolution entirely instead of adjusting the plan. ________________________________________ Strategies to Overcome Quitters Day Breaking the cycle of quitting isn’t just possible—it’s entirely within your reach with the right mindset and strategies. Let’s dive into how you can overcome the challenges of Quitters Day and stick to your resolutions long-term. 1. Set Realistic and Measurable Goals The key to success lies in creating goals that are specific, measurable, achievable, relevant, and time-bound (SMART). For example, instead of saying, “I’ll get fit this year,” try “I’ll exercise for 30 minutes three times a week.” By breaking big aspirations into smaller, manageable steps, you’re less likely to feel overwhelmed and more likely to stay on track. 2. Build Consistent Habits, Not Just Motivation Motivation is fleeting, but habits are sustainable. Focus on creating daily or weekly routines that make progress automatic. For instance, if you want to eat healthier, prep your meals in advance or stock your kitchen with nutritious options. Building habits takes time, but once established, they become second nature. 3. Accountability and Support Systems Having someone to hold you accountable can make all the difference. Share your goals with a trusted friend, family member, or even a coach. Better yet, join a community or group with similar objectives. Knowing that someone is rooting for you—or counting on you—can keep you motivated during tough moments. 4. Reframe Setbacks as Learning Opportunities Setbacks are inevitable, but they don’t have to derail your progress. Instead of viewing a missed workout or a bad day as failure, see it as a chance to learn. What triggered the setback? How can you adjust your approach to prevent it in the future? Remember, growth isn’t linear—it’s a journey filled with ups and downs. 5. Celebrate Small Wins Big goals take time, so it’s important to recognize and celebrate progress along the way. Did you stick to your exercise routine for two weeks? Treat yourself to something meaningful, like new workout gear. Celebrating small milestones helps reinforce positive behavior and keeps you motivated for the long haul. 6. Focus on the Process, Not Just the Outcome Instead of fixating on the end goal, shift your mindset to enjoy the journey. For example, if your goal is to write a book, celebrate the act of writing every day rather than stressing about completing the manuscript. When you focus on the process, progress feels more achievable, and the outcome will naturally follow. 7. Leverage Technology and Tools Apps and tools can help you stay organized and motivated. Habit trackers, fitness apps, and budgeting tools make it easier to monitor progress and stay accountable. Life happens, and sometimes your resolutions need to evolve. Check in with yourself weekly or monthly to assess progress. Are your goals still realistic? Do you need to adjust your timeline or strategy? Being flexible ensures that your resolutions remain relevant and achievable. ________________________________________ With these strategies, you can break free from the Quitters Day trap and turn your resolutions into lasting change. The key is to approach your goals with patience, self-compassion, and a focus on progress rather than perfection. Change doesn’t happen overnight, but with consistent effort, you’ll be surprised at what you can accomplish.
By Thomas Alessi December 9, 2024
Budgeting and dieting are two of the most common self-improvement goals people set for themselves. Both aim to bring about positive changes—whether it's financial stability or better health. However, many find that sticking to a budget is just as challenging as sticking to a diet. Here’s why: 1. Restrictive Nature Both budgeting and dieting often start with a restrictive mindset. Just as a diet might cut out all your favorite foods, a budget might eliminate all your discretionary spending. This restriction can lead to feelings of deprivation, making it harder to stick to the plan. Over time, the temptation to "cheat" becomes stronger, whether it's indulging in a dessert or splurging on an unplanned purchase. 2. Unrealistic Expectations Many people set themselves up for failure by setting unrealistic goals. In dieting, this might mean expecting to lose a significant amount of weight in a short period. In budgeting, it could mean expecting to save a large portion of income without considering necessary expenses. When these high expectations aren't met, it can lead to discouragement and abandonment of the plan altogether. 3. Lack of Flexibility Life is unpredictable, and both diets and budgets need to be flexible to accommodate unexpected changes. A rigid diet plan doesn't account for social events or cravings, just as a strict budget doesn't account for emergencies or spontaneous opportunities. Flexibility is key to maintaining long-term success in both areas. 4. Emotional Factors Emotions play a significant role in both eating and spending habits. Stress, boredom, and happiness can all trigger overeating or overspending. Without addressing the underlying emotional triggers, it's challenging to maintain a diet or budget. Emotional awareness and coping strategies are essential for long-term success. 5. Short-Term vs. Long-Term Mindset Both dieting and budgeting often focus on short-term results rather than long-term sustainability. Crash diets and extreme budgeting can lead to quick results, but they are rarely sustainable. A more balanced approach that focuses on gradual, consistent changes is more likely to lead to lasting success. 6. Lack of Support Having a support system can make a significant difference in achieving goals. Just as people might join a weight loss group or hire a personal trainer, having a financial advisor or joining a budgeting community can provide the encouragement and accountability needed to stay on track. Making It Work To make both budgeting and dieting work, consider the following tips: • Set Realistic Goals: Aim for gradual progress rather than drastic changes. • Allow Flexibility: Build in some room for treats and unexpected expenses. • Address Emotional Triggers: Be mindful of how emotions affect your habits and develop healthy coping mechanisms. • Seek Support: Surround yourself with people who encourage and support your goals. • Focus on Long-Term Changes: Develop habits that you can maintain for life, rather than quick fixes. By understanding the similarities between budgeting and dieting, you can approach both with a more balanced and sustainable mindset. Remember, it's about progress, not perfection. Watch our Think With A Drink episode for ways to be better at handling your expenses: The Dreaded B Word
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