Plan Now, Buy Later (or PNBL) means to plan and save for your purchases before you spend on them.
It is nothing short of revolutionary. Not because it is a new idea – it is not. Our previous generations were used to doing things this way. And we at Multipl, are bringing this concept of saving and spending back – just making it better, making it more gainful and making it more aligned to your lifestyle needs.
To further break it down, there are two components to PNBL:
1. planning and saving for a future spend in a diligent manner
2. making the purchase later in a smarter way
An undeniable fact is that you cannot only keep saving or only keep spending – for the simple reason that we humans do not live our lives like that. We have aspirations, dreams and a certain vision for the lifestyle we want.
So, Multipl’s PNBL is a smarter way to save and spend such that you don’t compromise on living the life you desire.
What no one tells you about credit?
Credit driven consumption in India is on the rise.
You must have come across the lucrative offers of all varieties of EMI schemes, most often clubbed with credit cards payments. There are a variety of such financing options – ‘Buy Now, Pay Later’, Zero-EMI, Low Cost EMI, and more.
In the last few years, many new companies have started offering the Buy Now Pay Later schemes. Other than that, credit card purchases are often rewarded. India’s BNPL market is expected to grow from $15 billions to $100 billions by 2025.
The credit industry is pushing towards such financing because of two main reasons:
- It leads to more revenue for them through more consumption by you
- It leads to more revenue for them through very high interest rates
50% of Indians default in repaying their credit card bills in time. It is a huge number, given that the penalty interest rates on credit cards are as high as 45% pa.
Similarly, the BNPL financing charges interests as high as 36% pa.
Studies show that credit leads to more consumption, as you don’t feel the pain of departing from your money at the moment of purchase.
However, unpaid credit card bills and EMI schemes are the proverbial albatross around your neck. For one weak moment that satisfies your instant gratification, you are forced to carry the burden for many months or years. The pain is so bad in most cases that you stop enjoying the actual product that you are paying for using your hard earned money as EMI.
The worst part – when you use your future money for paying EMI for a product bought in the past that you don’t really want or need now, you are losing on the wealth that you could have generated using that money.
Saving in Bank Accounts
As per RBI report, Indians keep over 50% of their savings in bank deposits – that too mostly in savings account.
Returns on bank saving accounts are at all time low – average 2.75% for most nationalised Indian banks. This rate of return does not even offset inflation – which continues to grow at a rate of ~5-7%.
So yes, while you can avoid credit binging by paying from your savings – is it really ideal for your pocket?
Why Multipl’s PNBL model is a smarter choice for spending?
Imagine you want to go on a trip. The trip budget is ₹1,00,000.
Best case scenario with BNPL option: You pay ₹1,00,000
Worst case scenario with BNPL option: You pay ₹1,20,000
Best case scenario with Multipl’s PNBL option: You pay < ₹80,000
Worst case scenario with Multipl’s PNBL option: You pay < ₹95,000
Simply put, the Multipl’s Plan Now, Buy Later will get you your money’s real worth.
More than just numbers
In addition to increasing your savings while spending, PNBL is designed to take away financial stress.
When you make your purchases after saving for it, you are free from worries afterwards. Moreover, since you have planned for the buy, you are making a mindful consumption decision – the one without any buyer’s remorse. You buy only what you really need and really want.
Basically, you can buy what you truly desire without any debt.
And it’s practical too!
There are so many spends every year that you can plan for – your travel, annual holidays, vehicle purchase, home renovations, furnishing, next smartphone, insurance premiums, children’s education and many more.
This is not to say that you don’t make any instantaneous purchases at all. If you have lost your smartphone and have to buy one immediately, you do. But ensure that you pay for it using means that do not create unnecessary financial stress on you.
However, if you are waiting for the next smartphone from your favourite brand, you can save for it in a smarter way and then buy it with more savings.
It’s not just ‘Plan Now, Buy Later’. It is ‘Plan Now, Buy Smarter’.