When someone asks themselves the question, “Can I afford this?” what are they really asking?
They are asking, “Do I have enough money to buy this thing?“
Right?
Meaning if there’s enough money in the checking account, score!
Or if their credit cards aren’t completely maxed out, sure!
Or if they just got paid, booyah! They’re in the money.
There’s only one problem with this…
…it’s the wrong question to ask. And definitely the wrong answer.
The answer to “Can I afford this?” shouldn’t only come down to whether or not you currently have enough money to buy the thing.
I mean, yeah, if you have zero dollars in the bank, then you probably can’t afford to buy those weird-looking Apple VR goggles that are for sale.
The truth is millionaires (and future millionaires) dig deeper.
They ask themselves better questions.
Financially savvy people don’t just ask if they have enough money to make the purchase.
They ask if they should make the purchase.
Just because you have the money doesn’t automatically mean you can afford it. You might have enough money to buy it.
…but that doesn’t necessarily make it a GOOD buy.
So instead of asking, “Can I afford this?” a better question is:
“Is this a wise purchase?”
I always ask myself this question before buying anything.
What makes a purchase wise?
A few things:
- You have enough money
- You won’t incur debt to buy it
- You will have enough money after
- Your life will improve with the purchase
So, let’s say you’re living paycheck-to-paycheck. And you just got paid.
Your check is $1,400 after tax.
That sick 80-inch TV you want just went on sale for $999.
Your paycheck can easily cover the cost of the TV.
If you ask yourself, “Can I afford this TV?” you might answer yes. After all, you do have the money to buy it.
But when you ask if it’s a wise purchase, the answer might be different.
If you’re living paycheck-to-paycheck, every dollar counts.
You might have enough to buy the TV, but you probably won’t have enough after the purchase to pay your bills, buy high-quality food, and leave enough left over for an unexpected expense.
So:
- Can I afford the TV? Yes.
- Is the TV a wise purchase? No.
Always dig deeper. Ask better questions.
That’s it for this week. Chat next week!
– Steve
