I did a scary adult thing and I want to tell you about it. I decided to take out a loan for a large purchase, even though it was my last resort. It all started when I offered to give my grandpa my old full-size bed for when he moved into a new, smaller place. For a while now, I’ve wanted to upgrade to a queen-size bed, but didn’t feel I could justify it until I moved. Who would take the old bed? How would I, just a girl, move an entire bed into my current apartment?
When the date was set for my uncle to take my old bed to my grandpa’s new place, I started frantically looking for mattresses in a box that would be easy for me to maneuver. My parents gave rave reviews of their mattress in a box, but as I searched around, I noticed something glaring: None of these websites took Klarna, my primary pay-later option that splits larger payments into four and charges to my credit card every other week. However, they all offered Afterpay, which I knew did not take Discover (my only credit card). If I wanted to use Afterpay, I would have to connect my checking account or use my debit card. This defeated the purpose of making a big purchase; I wanted to be able to add it to my credit card balance so I could pay it off over time instead of having it directly taken from me.
I even went to Klarna’s website to see if any of the mattresses I wanted were available at the source, but all I could find were cheap alternatives that wouldn’t fly. I wanted a good-quality mattress that I could have for a while, and I was willing to shell out a little extra for it. But I didn’t want to be saddled with payments I couldn’t afford—I had to find something that struck a happy medium.
I chatted briefly with my mom about it, mulled it over for a couple days, then made my decision: I would take an Affirm loan and pay off my mattress on a monthly basis over the next 12 months. The money would come directly from my checking account, but I wouldn’t have to deplete my savings all at once to pay for it. This gives me the advantage of continuing to save for my other goals while paying off the mattress. But I was still nervous about not having enough money in my checking account at the time the payments would be processed—the fear of overdrawing loomed, so I had to take action.
The minute my loan was confirmed, I opened my phone calendar and added each monthly payment as an event on the day it will be due all the way until 2024 when the loan is paid off. This both solidified the dates in my head (thankfully, they’re all on the seventh day of the month) and gave me the peace of mind of knowing exactly when the payments would be taken so I could ensure my checking account had enough funds.
On the last payment, I added a note for my future self:
Affirm gave me the flexibility I needed to pay smaller increments of the full purchase amount over a longer time period, but the catch is that, unlike with Klarna and Afterpay, I will be paying some interest. However, I will not be paying compounding interest (which would increase over time), according to Affirm. On my loan confirmation email, I can see exactly what I’ll be paying and what the charges are—and nothing about that amount will change!
Essentially, I am paying around 2% interest on the entire purchase, but the amount of interest decreases with each monthly payment:
When making this tough decision to take out a loan, I found that it was still the most cost-effective and reasonable way for me to buy the mattress I really wanted (Nectar hybrid mattress, if you’re interested—great for side sleepers!). The mattress was also on sale the weekend I bought it; I didn’t want to wait and possibly open another credit card that Afterpay allowed when the mattress price would likely go up and I would be spending more anyway.
I will be adjusting my budget accordingly to incorporate this monthly loan payment, another behavioral finance hack that should help me visualize how much I’m spending so I can continue building up my savings. If anything goes wrong, I’ll keep you updated on the process! But for now, no news is good news 😅.