Coin collecting is a fun, rewarding, and even profitable pursuit when done correctly. However, there are circumstances when it can have a chokehold on your finances and make life less enjoyable than it could be. There are many ways to purchase your beloved coins, but here is one snake you really don't want to get too close to.
Use credit cards sparingly Credit cards are so easy and convenient to use, that they also become easy to abuse. Many people don't know what interest their credit cards are charging and give little thought to it. It seems inconsequential on a month-to-month basis.
Credit card interest is almost always double digit and double digit interest compounds quickly. True, coins are an asset whereas most credit card purchases are liabilities, so at least you aren't losing from that aspect. But the interest paid on the card can easily outrun any appreciation you may get from the coin value.
Most coin dealers make you pay cash for gold and silver coins. That's good for me. That way I can see exactly how much the coin is costing at the time I purchase it. However, if that cash could have been used to pay down credit card purchases, the cash purchase is about as good as buying it on credit.
Get rid of the consumer debt and buy with cash. If you do need to borrow for a coin, get a loan that's single digit interest and not with the credit card. If you do use a credit card, pay it off every month, or as soon as you can.
The best way to manage coin purchases is by budgeting for them. Determine what you can reasonable afford to spend on coins and maintain your desired lifestyle at the same time. Then stick to the budget!
I have been willing to give up a lot to own coins, so they become a large part of my budget. I have also learned the value of planning and waiting for the right coin. I don't need them all right now, though that's how it feels a lot of times.
There is a freedom in being without debt That freedom is something more appreciated when you've felt the bondage that being over-extended can have on you. I love my coins, but I think I love my freedom from bondage more. Now, I practice self-restraint in my coin purchases. I use the word "practice" because sometimes I fail.
If you're in this situation 1. Sit down and figure your monthly living expenses. Then allow as much as you can for repayment of double digit debt. Be sure to allow some funds for coin purchases during this time, so you can survive the month. 2. Don't go where you're the weakest to spending, when you need to pay off debt. 3. Post reminders of why you're doing this activity and the rewards for staying the course. 4. Make payoff milestones and reward yourself when you meet them.
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