When it comes to purchasing big ticket items, society in general tends to asks 2 questions. How much does it cost? and What are my monthly payments? The big problem is that we tend to leave out the question, How much will the total cost be when it is paid off?
Not considering the 3rd question, has put most of America into trouble at some point or another, including myself. Your best bet is to pay off credit cards every month, in other words, live within your means. Don’t use credit for things that do not have lasting value (like dinner, concerts).
There are of course things that are just too big to not use credit for, such as a car or a house. In both cases, a shorter loan term may cost slightly more, but the savings in interest can be huge. The chart below is a good example of interest savings. When taking out a home loan, many of us need 30 years to pay it in order to afford the payment. If you do not need it however, I urge you to go for the shorter term. If you already have a long term loan, consider a refinance to a shorter term. Another option is to make additional principal payments on your current loan, you would be surprised how little extra you need to pay to double your principal payment, especially in the early years.