Should I Use a Student Loan to Buy a Laptop?

Austin is a college student. His student loan is due soon, but he'd like to borrow $2,500 to buy a new laptop. Dave thinks going into debt to buy a laptop is a bad idea.

QUESTION: Austin in Illinois is a college student. His student loan is due soon, but he’d like to borrow $2,500 to buy a new laptop. Dave thinks going into debt to buy a laptop is a bad idea.

ANSWER: If you’ve listened to me very much, you know that I don’t tell people to borrow money. So I would not tell you to borrow money for a laptop. I can’t tell you that it’s a good idea to do that.

I also have the real sense that I’m not going to talk you out of it. I think the thing you’ve got to realize that these decisions now, you’re going to be paying on them for years and years and years. You are going to look up and be 32 years old, married with three kids, and still have a payment on a laptop and be laughing about how clunky it was back in the year 2012.

That will be the story you’ll tell, and the reason you’ll tell it is because from that vantage point you’ll see that it was a bad purchase, and it’s a bad way to do the purchase. I think you ought to buy a used laptop that will do the job, and you pay cash for it. You don’t finance computers. At any point in your life, it’s not wise to do that.

The thing I’m pointing out is this: You’ve got to make a decision where your prosperity comes from. Does it come from borrowed money, which is a false prosperity, or does it come from earned money, which keeps you in check and in tune with your reality? When people try to borrow their way into a position in life or an ownership of stuff in life that they really can’t afford, then they struggle the rest of their lives paying payments on stuff.

You live your life financially in the past when you pay payments. When you are investing, you are living your life more in the future and in the present. If you want to live way in the future, that would be called giving. But please don’t do it. Please stop. I don’t know if I can talk you out of it, but if I can, I will.