Evening star., 1939-12-02
Save and Pay Cash,
Avoid |nsta||ment
Costs, Say Experts
SeIf-Finoncing by Loon
Association Account
Would Aid, They Assert

Cutting 100000 from the 1s41
cost of radios, rugs and refrigera-
tors to American families is sug-
gested by the Home Building and
Home Owning Committee of the
United States Building and Loan
League. The economy would be ac-
complished by reducing, through
self financing in savings and loan
association, the carrying charges
families usually pay on these articles
when bought on the installment
plan, estimated at s85 900, 900 in 1888.
Probability that higher prices may
prevail a year from now if war con-
ditions continue abroad and do
mestic prosperity makes strides was
cited by Paul Endicott, Pomona,
Calf, chairman of the leagues COM
mittee, as a reason why families
should figure out how they can get
as much article for the same amount
Of money year from now.
Ability to finance themselves with
the capital they have built up during
1910 is the secret of the plan sug-
gested for saving millions of dollars
In interest on installments. The
cost of buying ION time" is neces-
sarily higher when it is done without
any security than it would be when
a family has a savings and loan
association account against which it
70 noc1 for tho
usual installment-purchased objects,
or from which it may withdraw the
cash to make the purchases. Saving
of $40 to SIS a month beginning
with January, 1910, is advocated as
the way to arrive at the needed
capital for elf-financing of large
household purchases year or IA
months from now.
Based on 1898 Figures.
The estimated reduction possible
In the cost of household furnishings
of a durable nature is based on the
amount of such buying which people
did on the installment plan in 1898,
which was approximately $1,C00,-
100000, the committee said.
Loans on the security of an indi-
vidual's savings and loan association
account cost anywhere from to 6
per cent and the interest is charged
only on the balance each month
after stated amount has been paid
off on the principal The customary
effective rate on installment buying
is from 9.2 per cent up.
The cost of loans based on saw
ings and loan association accounts,
with the maximum interest rate in
use today, would be $30,405 800 if
$1,000 100000 worth of household
goods were bought with money bor-
rowed in this fashion," said Mr..
Endicott.. "Of course, if the owners
of such accounts decided to finance
their purchase of furnishings by
drawing the money right out instead
of using it as security for loans when
they came to buy their household
furniture year after year, they would
save the full $85 5,284 900 which in
stallment financing cost last year
They would at the same time be in
terrupting their savings program
and forfeiting the dividends on their
accounts which 60 right along earn
ing when they are put up as col
lateral for a loan.
Borrowing on Account Urged.
because of this circumstance 1t
Is wiser for a family contemplating
anything from a radio to a washing
machine to plan to borrow on the
account they have built up. In this
way they will keep the savings habit
and savings program intact"
1t was pointed out that millions Of
people actually are quite thrifty in
eking out the necessary installment
payments on articles for the house.
hold after they have bought them
and they should be persuaded to use
the same will-power in setting aside
money before the article is bought
in order that they may effect sub
stantial saving in interest. Such
money earns dividends in the savings
and loan association during the year
1t is being accumulated.