A store ad is staring at me, promoting a sale on household furniture and appliances. The deals are straightforward enough: Sign a contract, make a payment every month, and after 24 payments you own the item.

But let’s look at the numbers.

Here’s a Samsung 55-inch “smart” TV on sale for $80 a month (technically $79.99, but I’m rounding up). Normally, the price is $112 a month. So if you buy at the normal monthly price, you’re paying $2,688 total ($112 a month x 24 months). If you buy at the reduced monthly price, you’re paying $1,920 total. Yes, the sale saves you money. But smaller print in the ad lists a “cash price” of $1,127.

If you pay the full $1,127 for the TV at the time of purchase, you’re saving 41 percent off the sale price and 58 percent off the non-sale price.

The same is true of other items. A GE washer/dryer duo goes for $110 a month (on sale from $120 a month). After 24 monthly payments, you’ll have paid $2,640 (on sale from $2,880). But the cash price in the same store is $1,550.

Some of you are saying, “But I don’t have thousands of dollars to throw around. It’s hard enough to come up with money for the first payment.”

That’s right. And that’s how it should be.

Wait until you can afford it

It’s not fun to hear, but smart consumers who can’t afford the full purchase price tend NOT to buy. Instead, they save up until they can afford to buy, whether it be televisions, computers, washing machines, living-room furniture, or beds and mattresses.

There is a danger to buying items via the installment plan. First, you end up paying a lot more money. If you can’t come up with the full purchase price now, then how can you afford to squander the extra hundreds or thousands of dollars you’d be spending on the installment plan?

When you buy on the installment plan, you don’t become the owner until the final payment has been made. Furniture and appliances, like cars, can be repossessed. I know a couple who bought a bed and mattress on installment, and within a year the items were repossessed. This left the couple with no bed, no mattress and no money back from their payments made. They ended up with zilch.

Granted, there are times when an installment plan makes sense, provided you’re aware of what you’re doing and why.

Plan for emergencies

Emergencies crop up. If your refrigerator dies, replacing it is necessary—even if you have to resort to an installment plan. It’s still far cheaper than eating out all the time solely to skirt the problem of being unable to refrigerate food.

But washing machines? Use a laundromat while you’re saving up for your own machine.

Before signing up for a car financing plan, figure out your total cost for purchasing the car. (Take the monthly payment and multiply it by the number of payments you’re promising to make.) Reducing the monthly payment comes at a high cost—it extends the number of payments and thus increases the total cost for purchasing the car. 

A home mortgage is merely a gargantuan version of these installment plans. That’s why if you can’t keep up your mortgage payments, the bank can foreclose on your home.

I’m not saying you should NEVER use an installment plan. Occasionally it makes sense, especially if you and the seller can agree that you are renting, not purchasing, the items. As in leasing a car.

In general, it’s wisest to do the math and try to save. If you can’t afford to buy a gizmo outright, consider saving up. In the long run, you’ll have spent less.

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