How To Use Affirm to Grow Your Wealth

This post may contain affiliate links. Please see my disclosure to learn more.

In general, I am not a big fan of financing companies because I believe that they enable people to buy more than they can afford, with disregard to social responsibility and actual value. We live in a consumerist society focused on bombarding its constituents with more reasons to buy. The endless cycle of consumption is a rabbit hole that many fall into and never get out of. Because of this, I am generally hesitant to promote financing to my readers … unless it has potential to grow their wealth.

Before reading on, I do want to make the following statements.

I am assuming that the person reading this post is financially educated and savvy, does not live paycheck to paycheck, wishes to grow their wealth, has mastered their budgeting basics, and has an aversion to spending on frivolous things that don’t add value to their life. I would like to say that if you are not all of these things, we need to start elsewhere on growing wealth, and this FREE Mastering a Budget course is a great place to start.

This advice is not for those who are privvy to emotional spending, stress shopping, or just mindless consumption, that which pervades much of our American society. If you feel you have the aptitude and wherewithal to use the information I have yet to divulge about taking advantage of financing in order to grow your wealth, then I welcome you to the rest of the post. But if you have even the slightest uncertainty, I recommend you start with beginner posts such as any of the following:

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With that said, let’s continue on to how we can use financing companies such as Affirm to our advantage.

What is Affirm?

Affirm is a financing company that has recently experienced an increased exposure due to financing partnerships with multiple companies. In January 2021, they went public with the ticker symbol $AFRM and have seen an increase in stock value since their IPO at $45. I have personally seen Affirm used in a few of my favorite companies such as East Fork Pottery, La Marzocco, Nisolo, Dyson and Leesa. While this post was not written in sponsorship with Affirm, the eureka moment for utilizing its financing options came to me at a time when I was mulling over alternative wealth growing strategies.

Given that someone has good credit and can secure a 0% interest rate with Affirm when buying big purchases, they can extend their payments over a short number of months (because long-term financing leads to increased rates) which may allow for investment opportunities.

We aren’t talking big bucks here, of course. But what if everyone who is financially stable approaches all forms of consumption with a mindset of, “pay myself first.” If they embrace this mindset, then they would likely prefer to pay for their new Leesa mattress in three payments over the course of three months with 0% interest rather than upfront. If a new mattress costs $1,200, then divvying up payments into thirds allows for $800 to be invested over the course of one month and $400 to continue being invested for an additional month. You are still able to obtain the product at $0 additional cost to you via Affirm financing while Affirm gives you the time to grow your money. Of course, this is assuming that you were already going to buy this product that adds value to yourself. It is not an excuse to buy, just because.

This concept of pay yourself first is not the mentality that many people take. However, I view it as a great strategy for growing wealth – one that simply requires the reframing of our approach to paying for stuff.

It seems quite silly. Small, even, for some people. It can be especially controversial for finance people who promote paying everything upfront in cash. Some people may view Affirm financing as debt. I would like to argue that we can reframe this perceived debt as a calculated decision made to grow your own wealth before growing someone else’s.

Finance gurus who dissuade the use of credit cards may be cringing at my suggestion, but I guess I’m not exactly conventional in that regard. I mean, I use the opening of credit cards in order to fly globally for free by travel hacking! So yeah, I love credit cards (as long as it is used in a controlled manner to further yourself along your life path). And I like the flexibility Affirm gives people, who may take advantage of the opportunity to grow wealth.

As I said at the beginning of this post, if you are someone who hasn’t yet mastered your spending and your budget, I recommend not trying this tactic. But if you are ready to go next level with the way you pay for your stuff on a day-to-day, it’s something worth considering.

The True Cause of a Spending Problem

This post may contain affiliate links. Please see my disclosure to learn more.

Do you have a spending problem? Are you someone who just can’t make ends meet? Have you found that no matter how much you increase your income, you can’t break the paycheck-to-paycheck cycle? Do you find yourself shopping when you are stressed or tired or sad? Perhaps this post is for you.

It may not be what you want to hear, but the truth is this:

A spending problem is the result of not knowing who you want to be, or where you want your life to go.

Emotional spending occurs because a void needs filling. Unfortunately, more often than not, the spending itself fails at solving the problem. Rather, it extenuates it by creating a loop cycle that enlarges the void and brings us further from our true goals.

For example, have you ever tried to treat your stress by shopping online? At first, it felt good, but after a while, regret starts to sink in and your newfound purchase falls short of delivering lasting happiness, not to mention instantly decreases in value. Does it sound familiar to you? Because it sure does to me.

Not knowing who we want to be or what we want our life to look like makes it difficult to know what is worthy of our time and money. If we do not have a clear purpose, goal, or ambition, then it becomes easy to fall into the cycle of spending our resources on what people around us promote, rather than what we need. Because what we gain was never truly for us, it doesn’t fill the void at all, resulting in spending again, and again, and again.

If you want to treat a spending problem, my financial advice is to start with you. Define who you want to be and where you want your life to go. At least, that’s what we did and it worked for us. Because I used to be like you, too. I had $30,000 in credit card debt. I had more than half a million dollars in student loans. I went shopping every weekend in my early twenties and bought avocado toast while I was in dental school. I had a serious spending problem, until I realized who I was and what I wanted.

I am a simple person. I enjoy reading books and baking bread. I find joy in quiet time and yoga. My mind is healthiest when I am outdoors collecting rocks on a beach. I wanted a life of financial freedom. I wanted to be able to choose a job to my liking. I wanted the autonomy to work in a way that is aligned to my values. I want the freedom to call my own hours, to choose days of rest, to pursue other passions, and I understood that I couldn’t do that if I chose material stuff, trends, and status symbols. That’s how this all started.

I was lucky enough to find a financial advisor in my early years who delved deeply into what I wanted for my future. It was only then, when I saw the big picture, did I have the motivation to get rid of my spending problem. And if I am being honest, without a clear picture of where I wanted my life to be, I would just as likely have reverted back to my previous ways. It was the clarity that kept me going.

The true cause of a spending problem is not being intentionally clear enough about your life.

Here are good places to start:

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Why You Need A Budget

I always tell people how having a budget helped turn our life around. For some people, just the mention of the “B” word makes them cringe. There are many negative implications attached to budgeting, but I am here to tell you that they are not true. Many people believe having a budget is limiting, as if it will tell you what you can and can’t do. I completely disagree. I think having a budget is freeing, because it allows you to finally tell your money where to go. When you have a budget that works, you will have your money working for you, instead of the other way around.

You will never know how you are doing financially without measuring it in a factual manner. Likewise, you cannot improve if you don’t know what you need to improve upon. Numbers don’t lie, and your budget will be the best reflection of how well you do with controlling your spending. The first question I ask people who tell me they have difficulty saving money is, “how much are you spending each month on _____?” If they can’t give me a definitive number, then therein lies their problem. I liken it to people who say they can’t lose weight. If they don’t know how many calories their taking in and how many calories they’re burning per day, then how do they expect to have any grasp on the things they can improve on in order to see results. A budget is necessary in order to track progress. People will usually try to ball park their spending, but it never works. Why? Because we always underestimate how much we spend. It’s human nature. It’s difficult to understand what’s keeping us from financial freedom if we do not know what we are doing with our money.

Budgeting will teach you more about yourself, what you value, and what you want in your life.

There are many reasons why you may want to master your budget. Here are some ideas.

  • To free up your time. You may feel as if work is taking up all of your time. You may want to cut down on work or change jobs completely but you can’t do so because there are bills that need to be paid. A lifestyle needs to be supported. Getting your budget in order may be just want you need to decrease your spending, thus allowing you to take that part-time job or cutting down on your work hours. Some people even want to become so financially savvy that they can pursue complete financial independence and retire early!
  • To relieve stress. Having a shortage of money can be very stressful. However, if you budget correctly, you should never run into that situation. Mastering your budget gives you more flexibility and allows you to be better positioned to deal with unexpected expenses.
  • To have more freedom. The more financially secure you feel, the more freedom you will have when making life decisions such as changing jobs, quitting work, traveling the world, starting a business, starting a family, and more. When money is tight, these things may seem very risky. But when you have a grasp on your budget, you can predict how much freedom you have in pursuing your passions. For example, if your dream is to time off and travel the world in 2020, you can definitely make that dream happen but planning ahead and using your budgeting skills to prepare yourself for that.
  • To support yourself and your loved ones better. For me, this was MY “why”. I was graduating from dental school with over half a million dollars in student debt, and was also about to get married. I knew what a burden I was choosing to bring into our marriage. He didn’t mind it, but I did. I was propelled forward with this drive to release us from this student debt, so that we can be free to pursue the lives we want to lead without being tied to working in certain fields to support large loan payments. It isn’t fair that the person I most love would be affected by debt because of the career I chose to pursue. So I embarked on a journey to get our finances in tip top shape, and we have mastered our budget so well that what people once told us would be impossible to do is being done! They said we wouldn’t be able to pay off our debt in under ten years considering the salary we would be making. Well, we are on track for eight years, and it all started with mastering our budget!

So, do you have a budget? What’s stopping you? If you want to kickstart your budget and start telling your money where to go, check out my FREE course, How to Create A Budgeting Tool That Works, and start achieving your life goals sooner. I hope it helps you with your financial journey as much as it’s helped us.