Cash vs. Credit on Cars and Homes

I've read a lot of financial advice that suggests that you finance a car and a house.

On the car side, the argument is that a nice reliable new car is worth more than scraping along with used junkers that leave you stranded.

On the house side, the argument is that it's a forced savings plan, the interest is tax deductible, and you could invest what you would put in paying off your house and put it in a nice investment and get more out of it. This is especially true now that interest rates are 3%.

But let's look at it this way: if you're buying a house with cash, would you spend as much money? If you're buying a new car with cash, would you do the same? So rather than compare apples to apples between a car payment or not, think about the fact that you would spend less money overall going the cash way, which would pay off in the long term.