Cash or Borrow: I have enough to pay cash for a new motorcycle, but the loan sounds good. What do you think?

One odd aspect of personal finance is the amount of wrong information. I guess it’s a byproduct of a diverse population with 330 million Americans.

There are cultural diversities, geographic diversities, and demographic diversities. Basically, what you know about finance likely flows from your relatives, your region, and your age.

One thing many people overlook is the good side of borrowing. Borrowing is convenient, inexpensive, and enhances flexibility. Used properly, it can magnify positive steps as you grow towards financial success.

In your case, you can buy the motorcycle and still have money in the bank! Think how that improves your financial flexibility. If an emergency arises, you can easily withdraw money from your savings to cover it. If you’d paid for the bike, that might not have been practical. The emergency might have required a credit card or personal loan, either one with a much higher rate.

I’m assuming the motorcycle loan interest rate is low. I’m also assuming you can pay it off anytime you want which is another wondrous flexibility. Further, any enhancements that come to your credit score might lower your mortgage interest rate when that time comes.

Your credit score is already good, so qualifying for a mortgage won’t be hard. But the interest rate and terms you get will be better with a higher score. Mortgage rates are likely the best borrowing rates you will ever see, so lowering them further is a very nice bonus.

Debt can become a burden for people struggling to get by. Yet, for other folks, it often provides a way to enhance their situation. It’s a deliberate choice that brings added convenience and liquidity. It’s a luxury with little downside … at worst, you can pay the loans off before their full term if that makes better sense.

You alone decide if and when that works for you. I think you are on the right track.