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Season 2 Episode 10: "Which is Smarter: Getting a Loan? or Saving up to Pay Cash?"

Season 2, Episode 10: “Which Is Smarter: Getting a Loan? or Saving up to Pay Cash?”

The financial lessons we received from our parents are problematic for many reasons.

For one thing, they’re often out of date, as the economic atmosphere of the 1970s and 1980s is a far cry from what we’ve experienced in a post-2008 world. We’re long past the quaint advice to pay for college by “getting a summer job” and to start a career by “walking into a business and asking for a job in the mailroom.” Heckin precious.

But there’s also the way an assumption of background knowledge can lead to further confusion. For if you don’t understand basic financial principles, the sweet knowledge nuggets your beloved Boomer dad drops on you might go down like lead balloons. Just as you can’t understand where Beyoncé came from without Destiny’s Child, you can’t talk about getting loans until you understand how interest works!

This week we’re dealing with just this issue. Petey is one of my oldest and strangest friends. I made him walk down the aisle with Kitty at my wedding in the hopes that those two weirdos would have a vulgar joke-off (alas, they conducted themselves with the decorum expected of a bridesmaid and a groomsman and saved the nasty shit for the dance floor).

Petey has his head all in a tizzy over his dad’s vague and incomplete financial advice. So we decided to set the poor boy straight!

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You do not need a 52-inch TV on which to watch steroid-enhanced men in spandex bowl each other over in between reminders that we are all slaves to capitalism.

Dafuq Is a Down Payment and Why Do You Need One to Buy Stuff?

Sometimes you don’t have enough money in the bank to buy stuff, so you borrow money to buy the stuff. But if you have some money, it is always better to use it to pay for part of the stuff than to borrow all the money you need to buy the stuff.

In an ideal world, we’d all pay for expensive things like cars and houses and a college education with the money that we already have. But unless you have a Scrooge McDuckian money vault at your disposal, paying cash in full for a car or house or bachelor’s degree feels nigh impossible.

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