The rapid rise in buy now, pay later services such as Zip Pay and AfterPay, really can be quite terrifying given the current period of economic and financial uncertainty for many households. A recent survey conducted in Australia found that approximately 60% of survey respondents outlined that they were influenced to make a purchase because they knew that they didn’t have to pay it off right away and could make payments later.
The financial uncertainty created by COVID-19 has seen many shut down their accounts, with approximately 38% of those surveyed saying that they had shut down their account in the last 3 months due to the uncertainty, not to mention making purchases that really were a long way from essential. Given the astronomical growth in buy now, pay later customers, is 38% really enough given the current uncertainty, or are many going to be in for a bumpy road ahead.
Are we travelling full steam ahead toward ‘Buy Now, Pay Never’..?
There are many of us that are quite capable of being disciplined with our spending, and can responsibly utilise these services and set a reminder each month or on a regular basis to pay them down. However, this is certainly far from true for many others.
Let’s take a look at some of the most ridiculous purchases our celebrities have made:
- Nicolas Cage’s purchase for $276,000 of a stolen Mongolian dinosaur skull
- Paris Hilton’s $325,000 splurge on a villa for her dogs
- Kelly Rowland’s purchase of a $5,200 Swarovski-crystal-studded bathtub for Blue Ivy
- Donald Trump’s installation of the gold bathroom on his $100 million private jet
- Beyonce’s $100,000 gold leggings
- Lady Gaga’s purchase of a ‘ghost buster’ to keep her safe while travelling for $50,000
- Bono’s $1,500 plane ticket so that his hat would be comfortable and have its own space
- And of course, Nicolas Cage (to finish the list as well as start it) purchased an Egyptian pyramid so that he could be buried in the tomb for an undisclosed sum.
Of course these are celebrity purchases, and you could sit back and say ‘well, they can afford to blow their money on stupid purchases’, however it’s not just the rich and famous that can’t control their spending.
- Somebody paid $5,001 for Britney Spear’s used pregnancy test
- One eBay user decided to pay $3,000 for an imaginary friend – quite an easy business to scale you’d have to imagine
- A 19-year old fan purchase $1,025 for Justin Timberlake’s partially eaten French toast
These are of course extreme outlier examples of crazy spending, and we haven’t even started to explore those purchases made after a glass of wine or two.
The key message here, however, is to ensure that you’re prepared financially for what the next 6 – 12 months may bring. The uncertainty created by COVID-19 is and will impact many families across the globe financially, and it’s important that for those of us that perhaps haven’t been too impacted at this stage to start bolstering the emergency fund, avoid racking up debt, ensure there is sufficient cash available for any loan repayments due and ensure that you can see this period of uncertainty out.
If you are using the buy now, pay later services, then ensure you’re disciplined about what you spend on and how quickly you repay these items. If you’re worried or have any concerns about your current financial affairs, be sure to reach out for help.
To Your Financial Success!
Jarrad Brown is an Australian-trained and qualified Fee-Based Financial Planner with Australian Expatriate Group of Global Financial Consultants Pte Ltd providing specialist financial advice and portfolio management services to Australian professionals in Singapore. Jarrad Brown is an Authorised Representative of Global Financial Consultants Pte Ltd – No: 200305462G | MAS License No: FA100035-3
Australian Expatriate Group is a division of Global Financial Consultants in Singapore providing specialist advice to Australians living abroad.
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General Information Only: The information on this site is of a general nature only. It does not take into account your individual financial situation, objectives or needs. You should consider your own financial position and requirements before making a decision.
*Please note that Jarrad Brown is not a tax agent or accountant and none of the content outlined here should be taken as personal advice. You should consult your tax agent and financial adviser to review your current personal finances and financial goals to consider whether this strategy is appropriate for you.