Cash or Credit?

Which one do you think leads to a more sustainable lifestyle? I think using cash or bartering for goods and services, coupled with buying locally are more sustainable. I can see a major purchase such as a house being done on credit with the goal of paying it off early.

Why am I asking? A discussion recently with someone regarding the big blue beast, aka the van. I own, outright and paid cash for the purchase, a 1994 Ford Econoline 150 Conversion van with a small block 8 cylinder engine. The discussion was about gas mileage. Gas on a bad month costs about $250. They suggested trading it in for something more “fuel efficient”. I admitted to having thought about that but really I can’t see the point to saving maybe $50 dollars in gas to take on a payment, if I am lucky of $300, plus the increase in insurance. 

After crunching the numbers, I went on to explain that I am trying not to incur debt but to make sure that I alleviate it. This is apparently a foreign concept, the idea not to incur debt. Granted 10 years ago I was all about “hey let’s charge it!” Learned a hard fast lesson. Basically if you can’t pay cash for it 1) save up for it or 2) maybe you don’t really need it. The whole idea that I prefer to pay cash or barter for things seems to be foreign to this person as well.

So what about you? What is your outlook on cash vs credit?


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