"Save now, buy later" and "buy now, pay later" are two different approaches to managing finances and making purchases. Here's a comparison between the two:

Save Now, Buy Later

"Save now, buy later" refers to a strategy where individuals set aside money over time to accumulate savings and then make a purchase once they have saved enough. It involves disciplined saving and delayed gratification. People who follow this approach prioritize saving money regularly, often in a dedicated savings account, until they have accumulated the necessary funds to make a desired purchase. This method helps individuals avoid taking on debt and allows them to have full ownership of the item when purchased. The merchant might give you a discount which adds up to your savings.

Buy Now, Pay Later

"Buy now, pay later" is a payment option that allows consumers to make a purchase immediately and delay the payment. It typically involves using a financing service or payment platform that offers installment plans or deferred payment options. With buy now, pay later services, individuals can make a purchase and split the total cost into multiple installments to be paid over a specified period. This allows them to acquire the item upfront without having to pay the full amount immediately. However, it's important to note that some buy now, pay later services may charge interest or fees for the deferred payment option.

Difference Between SNBL and BNPL

  1. Approach - "Save now, buy later" focuses on saving money over time to make a purchase, while "buy now, pay later" allows immediate acquisition with delayed payment.
  2. Ownership - With "save now, buy later," individuals own the item outright once purchased. With "buy now, pay later," ownership is acquired immediately, but payment is deferred and the item may be subject to repossession if payments are not made.
  3. Financing - "Save now, buy later" avoids borrowing or incurring debt, while "buy now, pay later" involves financing the purchase through installment plans or deferred payment options.
  4. Costs - "Save now, buy later" typically involves saving and spending only the amount saved, whereas "buy now, pay later" may involve interest charges or fees for the deferred payment option.

How does SNBL Work?

Let's say you have a goal of purchasing a new laptop that costs Rs. 30,000. Instead of buying it immediately, you decide to save money over a specific period until you have enough funds to make the purchase.

  1. Goal Setting - You determine the specific amount you need to save for the laptop. In this case, it's Rs. 30,000.
  2. Budgeting - You review your monthly income and expenses to identify areas where you can cut back or save more. This could involve reducing discretionary spending, finding ways to save on regular expenses, or allocating a portion of your income specifically for saving toward the laptop.
  3. Savings Plan - Based on your budget, you set a realistic savings goal and timeframe. Let's say you plan to save 3,000 per month for 10 months to reach your target of Rs.30,000.
  4. Registration Process – You can choose a merchant that offers the Save Now Buy Later option. You can then register, and choose the goal amount and duration. Once this is set, you can continue depositing the agreed amount every month for the agreed duration.

Conclusion

The choice between "save now, buy later" and "buy now, pay later" depends on individual financial goals, discipline, and personal circumstances. "Save now, buy later" promotes saving and avoiding debt, while "buy now, pay later" offers immediate access to purchases with the option to spread out payments. It's important to consider one's financial situation and preferences before deciding which approach is most suitable.

Frequently Asked Questions

1. What is "save now, buy later"?

"Save now, buy later" refers to a personal finance strategy where individuals set aside money over time to accumulate savings before making a purchase. It involves saving up for a specific goal or item before buying it.

2. How do I start with the "save now, buy later" approach?

To start with "save now, buy later," you need to define your savings goal, create a budget, identify areas where you can save, allocate a portion of your income for savings, and consistently save money until you reach your goal.

3. Are there any benefits to the "save now, buy later" approach?

The "save now, buy later" approach promotes financial discipline, helps avoid debt, and allows you to have full ownership of the item when purchased. It also encourages saving habits and long-term financial stability.

4. How long does it take to save for a purchase with the "save now, buy later" method?

The time required to save for a purchase depends on the cost of the item, your saving capacity, and your financial situation. It can range from a few weeks to several months or even longer.

5. What if I have an urgent need for the item but haven't saved enough?

If you have an urgent need for the item and haven't saved enough, you may explore other options like borrowing from a trusted source or considering a loan, but it's important to carefully assess the terms, interest rates, and repayment obligations before deciding.

6. What is Buy Now, Pay Later (BNPL)?

BNPL is a payment option that allows consumers to make a purchase and defer the payment. It enables users to split the total cost of purchase into installments, typically without any interest or fees.

7. How does BNPL work?

When using BNPL, you select the option at the checkout when making a purchase. You provide some necessary information, and if approved, you receive the item immediately while agreeing to pay for it in installments over a specified period.

8. Is BNPL the same as using a credit card?

While both BNPL and credit cards allow you to make purchases without immediate payment, they operate differently. BNPL services typically offer interest-free installment plans, whereas credit cards involve borrowing funds that may accumulate interest if not paid in full.