Anyone who’s spent any time in the car business, or probably sales in general, knows exactly what debt motivation is.  Management is always encouraging salespeople to spend every dollar in their bank accounts, buy new cars, and even buy houses.  With all those big payments due every month and no savings to fall back on, the salesperson will be hungry and work harder to sell.  That’s the thinking, anyway.

Debt Motivation is a terrible idea

I understand why this idea is used – sales is a cutthroat business, and salespeople need to be motivated.  But taking out thousands, tens of thousands, or hundreds of thousands of dollars worth of debt is not going to solve anyone’s money problems.  All it does it put you in a tougher financial situation, and gives you a lot more stress.  Added stress is the last thing most of us need. My hair is already starting to receed as it is – it would probably all fall out if I had any more stress!

Goal Motivation

You want a new car?  Fine by me.  I’m not going to tell you not to buy it.  But don’t buy it, take on a payment you’re not comfortable with, and hope that you can increase your income enough to get by.  That’s completely backwards, and I will tell you not to do that.  Adjust your budget, save some big cash for a few months / years.  Then make a big, fat down payment on the car you want so badly.  You’ve shown that you can afford payments comfortably ( you’ve been making them to yourself ), and your payment will be that much smaller.  (Or, if you’re so inclined, save up to pay cash for the whole thing. )

I know, I know.  How can a personal finance blogger recommend a car note?  Some folks just really prefer a new car, and I understand that.  If you do it the right way, you can save towards that goal, and not be negatively motivated.  Think of the car as the prize at the end of the tunnel.  You won’t have this huge, crushing weight of debt as a prize – you’ll have a shiny new car and little / no debt.  Isn’t that a whole lot better?