QUESTION: How not to fall into a debt hole because of installment plans?

Modern installment services and "buy now, pay later" have become very popular, but they carry a hidden threat to the personal budget and can imperceptibly lead to a deep debt hole. The main trap lies in psychological perception: the purchase seems free or very cheap because its cost is broken down into small parts. As a result, a person takes out several installment plans at the same time, forgetting that each of them is a full-fledged financial debt that will have to be paid from future income.

To avoid becoming a victim of spontaneous consumption and aggressive marketing, it is necessary to develop strict rules for handling such tools. First, never take out an installment plan for impulsive desires, entertainment, or spontaneous things. An installment plan is permissible only for truly necessary large purchases that match your financial plan. Second, strictly limit the total number of active installment plans — you should have a maximum of one or two at the same time so as not to overload the budget.

Third, include every installment payment in the mandatory monthly budget along with utility bills, housing rent, or payments for classic loans. If the sum of all installment payments begins to exceed the comfortable limit of free money, new purchases should be categorically abandoned. Finally, always keep a financial reserve in case of changing life circumstances. Remember that an overdue installment plan often entails severe fines and the transfer of the case to collection agencies just like a regular consumer loan.