When Smaller Payments Lead to Bigger Spending
Buy Now, Pay Later services are everywhere. At checkout, a $200 purchase can suddenly feel more manageable when it becomes four payments of $50.
That convenience is exactly what can make these services risky.
In a recent ARC Salt Lake segment, BookSmarts founder and CEO Jenny Groberg discussed how Buy Now, Pay Later programs work and why seemingly manageable payments can create problems for your budget, spending habits, and long-term financial goals.
Small Payments Can Make It Easier to Overspend
Breaking a purchase into smaller payments can make the cost feel less significant. Instead of thinking about the full price, you’re focused on what you have to pay today.
Jenny explains that this can take some of the sting out of spending and make it easier to buy more than you originally planned. The problem becomes even harder to manage when several purchases are being paid off at the same time.
A few payments here and there may not seem like much. But once they start hitting your bank account together, they can compete with money needed for groceries, gas, rent, and other essential expenses.
Convenience Can Encourage Impulse Buying
Online shopping is designed to make purchasing easy. Buy Now, Pay Later adds another layer of convenience by removing the need to pay the full amount immediately.
Jenny recommends doing the opposite: slow the purchase down.
She follows a 24-hour rule and uses the same approach with her children. When something catches their attention, they wait at least a day before deciding whether to buy it.
That extra time gives you a chance to ask a simple question: Do I actually want or need this, or am I caught up in the moment?
Returns Can Complicate Your Cash Flow
Returns can also become more complicated when a purchase is split across several payments.
Even after returning an item, another scheduled payment could potentially be drafted before the Buy Now, Pay Later provider processes the return and credit. Jenny points out that this timing difference can create additional disruption to your cash flow.
It’s another reminder that a convenient checkout option can create more financial tracking behind the scenes.
Focus on What You Can Actually Afford
One of Jenny’s main recommendations is straightforward: if you can’t afford to pay for a regular purchase upfront, reconsider whether you should make the purchase right now.
Using delayed payments doesn’t change the actual price. It only changes when the money leaves your account.
And when several future payments are competing for the same paycheck, it becomes harder to stay on top of the bills and expenses that matter most.
Give Yourself 24 Hours
You don’t have to make every purchasing decision immediately.
Jenny explains that shopping can have an emotional component. We may believe a purchase will make us look better, feel better, or help us accomplish something we want.
Waiting 24 hours gives some of that initial excitement time to fade. Then you can come back to the decision and ask whether the purchase still makes sense for you and your budget.
Sometimes, one day is all it takes to realize you didn’t really need it after all.
Jenny shares more about Buy Now, Pay Later services and ways to make more intentional purchasing decisions in her full conversation with ARC Salt Lake.
Watch the full interview: Buy Now, Pay Later discussion with Jenny Groberg of BookSmarts Accounting.
