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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For one thing, they’re often out of date, as the economic atmosphere of the 1970s and 1980s is a far cry from what we’ve experienced in a post-2008 world.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!

This week’s question

Today’s letter comes to us from Piggy’s friend Petey. He asks:

How do you know when it’s the right decision to get a loan rather than paying for something with cash on hand? My dad always tells me to “compare the interest rates against the rate of inflation and stock market dividends” which like… what?

For more on loans, down payments, and inflation, check out these articles:

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Earning Her First $100K: An Interview with Tori Dunlap

They say the first $100,000 is the hardest to save. Wunderkind personal finance guru Tori Dunlap says, “Challenge accepted.”

Kitty and I have known Tori since BGR’s inception. She virtually forced us, through sheer tenacity and brilliance, to adopt her as our little sister—our more knowledgeable, successful, savvy, and funny little sister who in every way exceeds the promise of this very blog and inspires us every day.

Like, just look at this motivational young feminist do her thang:

So when Tori announced that she was emerging from the chrysalis of rebranding into a new feminist financial coaching venture, Her First $100K, I knew I had to pick her brains about it. I just didn’t realize I was simultaneously going to be schooled on the greatest animated movie of our time.

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Bitchtastic Book Review: The Financial Diet by Chelsea Fagan

Listen, it’s no secret we’re hardcore BFFs with The Financial Diet. They epitomize all that is good and just about financial blogging for millennial women, and they were one of our early influences in creating BGR. Plus, we have a monthly syndication deal.

What I’m saying is, if you’re looking for an unbiased review of Chelsea Fagan and Lauren Ver Hage’s new book, The Financial Diet: A Total Beginner’s Guide to Getting Good with Money, based on their amazing website… you can fuck right off because this is not that review.

The Financial Diet The Book is a gorgeously designed, delightfully written boost of financial inspiration and motivation. Each chapter is a mix of personal narrative by Chelsea, interviews with experts, and super useful resources like checklists, recipes, and how-to guides.

While the website serves as an exhaustive resource for all financial topics under the sun, the book functions as a primer. It’s a shiny golden key to a mysterious door in the garden wall of all things #adulting and #girlboss.

Here’s what I learned.

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