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What does "afford" mean to you?

Trekkie

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Seems like a stupid question, huh? But I'm coming to realise that this means different things to different people.

I've always believed "if you can't pay cash, you can't afford it" and have tried to live according to this maxim (mortgages and first couple of cars excluded).

Recently, on another forum I heard someone say something along the lines of, "'afford' doesn't mean you have the money, it means you won't miss the money".

Suze Orman comes to mind - don't spend anything on anything unless you have a year's with of this and eight months' worth of that and have prepaid X, Y and Z.

I've heard other people say things like, oh, I can afford to pay cash but I'd rather let my good credit do the work for me and pay it off every month, interest-free. I also know people who habitually buy on credit, are strangled by the monthly repayments yet have no plans to reduce their spending, because "hey, the bank gave me all this credit, so surely I can afford it, right?"

On another forum where I am mostly a lurker I often see bitchy comments about "she has a $2 000 purse but drives a Civic" or "she has X number of Prada purses but has carpeted stairs", as if you need to reflect a certain level of wealth in your daily life or spend on things like cars or home improvements before buying something nice. I know this is contrary to what many of us here on PS believe, who are quite content to drive our cars until they fall apart or live in modest homes or save in other areas so that we can have a coveted stone or piece of jewellery. Often we prioritise differently to those around us. I have a colleague who sends her child to public school (not very good where we live), saying she can't afford private school fees ($600 more per year than public school) yet drives a brand new SUV every 3 years. That's her choice, and absolutely no judgement, but I wonder what "afford" means to her (and I would never dream of asking).

What does "afford" mean to you?
 

missy

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Good question Trekkie. For us (my dh and I) afford means we can pay for it outright without missing the money. That is it doesn't affect our overall portfolio and it doesn't hurt to spend it.

Considering larger purchases i.e. a house of course that affects our overall finances (and we didn't pay cash for our homes) but is also part of our financial future so evaluated differently by us. The monthly mortgage payments are easily made so we can afford it.

When considering your question I have to add that this depends on the purchase we are talking about as well as the specific definition of "afford". I look at it differently depending what we are talking about. A home purchase is also an investment for our future so makes up our financial portfolio whereas a piece of bling or a car does not so I consider them differently and therefore am willing to spend more on an investment like a home vs a car or a ring.

Hope that makes sense.
 

Arcadian

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For me being broke is that I don't have ANYTHING left to pay myself after the bills are done being paid. Our work situations are a bit different in that neither of us work in a traditional office setting.

We bought 2 homes with cash. yes thats nerve-wracking as hell but thankfully at the end of the transactions we weren't broke. It wasn't very comfortable the first 6 months after but I wouldn't change that. We both learned A LOT about home improvement and what improvements are best bang of the buck. Those were amazing learning experiences for us, and no, not everyone has the money to do such things. We wouldn't have either if we weren't careful with finances. But going forward I wouldn't do it again unless no other options are left to me.

The new house will not be all cash. we're going to take advantage of some of the tax breaks you can get for the first 2 years with a new primary home this time, and interest rates we locked in are extremely good. I don't need 2000sqft plus and the area we're looking in is not as expensive as the one we're leaving! We'll have a good cushion to fall back on.

I do play the credit game. I learned to keep as much cash in my pocket, play the game, get the points or cash back, coupon it when they're available, and keep it moving. I think you can do it that way if you're careful to not overspend, and let your eyes get bigger than your wallet. In a capitalist society, some sort of debt is a given.

Where people can get in trouble is when they try to keep up with people in their circle or do it to appear to have it all. Thats not the way I roll. I have what I have. What I don't have, I just don't have.
 

Madam Bijoux

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To me, being able to afford something means buying it without having to give up anything else and still having money readily available for emergencies.
 

wildcat03

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It depends what the item is. If it's anything up to a car, my feeling is that I need to be able to pay cash for it to say I can "afford" it. If it's a luxury item such as jewelry or a purse, that means that everything else needs to be paid off except the mortgage (and some student loans, as they will be forgiven in 4 years) to allow for that spending. If we're talking a house, then it means that we could comfortably pay the mortgage and all of our other expenses while still maximizing retirement savings and contributing to household savings. It also means that we would be able to afford the mortgage in the event of death or disability of the other person - so life and disability policies need to reflect current spending. I would never take out a 30 year mortgage and expect to spend 30 years paying off the house, either. My goal has always been to be able to do it in 15-20.

I have no issue with people who drive a Honda Civic but own a fancy handbag or nice jewelry. Everyone's priorities are different, and cars are a terrible investment (so are handbags and jewelry, but they are much prettier to look at!). I can honestly say, though, that I would 100% prioritize education over a late model car.
 

Queenie60

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We separate "needs" and "wants" - after all of our needs are met comfortably, then we can afford our "wants." I continue to find myself being frugal when purchasing the things I want, I prioritize them and enjoy what I have before purchasing more.
 

PintoBean

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To me it means that the purchase doesn't disrupt the status quo of saving and paying bills.
 

diamondseeker2006

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Before we spend on luxuries, first comes emergency savings, retirement savings, college savings for kids, unexpected expense savings (like car repair and that kind of thing), car savings accounts (we have paid cash for new cars for about the last 35 years). Our only debt is a mortgage. I wasn't buying $30k diamonds during the years we had kids in braces and paying for college, although we had a break and have the last one in college now. No college loans for any of our kids, either. So extra money beyond all those things can be used for luxuries.

I never understand on this site when people say they are selling jewelry because of unexpected normal expenses (such as car problems, vet bills, etc.). I do understand if a divorce happens or a job loss or major illness, of course. But if one needs to sell jewelry to pay unexpected normal expenses, I think they need to work on a budget to increase savings before buying jewelry. I don't follow Suze, but I agree with the idea of financial responsibility.

Oh, and we charge everything on either a card that gives points for hotels or airline points and pay them off each month and never pay interest. Our 30 year old married daughter has never had a credit card. She does not want the temptation of getting into debt.
 

kenny

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When people ask why I have a $9.95 phone that not only cannot go on the internet ... (last night I found out it can't even receive texts) I tell them I can't afford it.

Clearly I can, but I feel "Smart"phones, and especially those data plans, are overpriced.
They make too much money.
I won't set foot in a Starbucks for the same reason.
 

kenny

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PintoBean|1464279377|4036538 said:
To me it means that the purchase doesn't disrupt the status quo of saving and paying bills.
Well put.
 

partgypsy

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Afford has different meanings to me depending on what it is.
I think I can "afford" to send my youngest to private school, which means going into debt (a few thousand) for it, because it is very important for her to get specialized help for her learning disabilities and am willing to have short-term debt or even some sacrifice to make it happen. I may say I can't afford say a piece of jewelry, even if I have more than that in savings and no other debt besides a mortgage, because I feel that money is only for emergencies or are earmarked for more basic things/future replacements. I would need an excess to feel I could "afford" it.

I had a friend from the northeast. To me she was well-off and comfortable and didn't have to worry about money. However she was shocked I would buy myself say a 1K ring and said she wouldn't feel comfortable spending that much on herself. At the same time she was OK buying new vehicles, remodeling her house, or paying for expensive lessons/schooling for her children, all of which as more expensive than a ring. For me I would find it very hard to buy a brand new car, even if I had that amount in savings and could buy it in cash.
 

tyty333

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That's a tough one because in reality we can "afford" a lot of things but we have retirement looming in the next 10 years
and I feel like that is a big black hole. We have been saving for retirement for a long time but to me it still doesnt matter
how much we have, I always question "will it be enough"? My MIL is in a lovely retirement home which is $3500 a month.
That's a pretty typical fee. That, with all her medical bills (fallen 3 times in the last couple of years causing months in
nursing homes) eat up a lot of money so I worry about things like that happening that you dont really plan for.

So "afford" has a lot more meaning to me then can we pay for it without it affecting anything (status quo as mentioned above).
Afford also brings to mind "do I/we need it"? How much do I want it? How much satisfaction will it bring to me? These are
tougher questions for me to answer than do we have enough money to get it without it affecting anything. In the long run I never
want to be in need or have to rely on my kids. I think it's easier for younger people to define "afford" than it is for someone
near retirement who has limited time to make/save money.
 

iluvshinythings

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826
Interesting question.

For most things, I think being able to "afford" something means I have the cash and won't have to dip into savings. It also means that all other expenses are comfortably met.

I think for me "afford" = what I feel comfortable spending and what I feel is a good value for the money. What I can afford tends to vary from situation to situation. I can afford more when I want the item more.
 

dk168

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I go with my dad's advice - if I have to ask about the price, then I cannot afford it.

DK :))
 

leukolenos

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tyty333|1464292406|4036588 said:
That's a tough one because in reality we can "afford" a lot of things but we have retirement looming in the next 10 years
and I feel like that is a big black hole. .... I think it's easier for younger people to define "afford" than it is for someone
near retirement who has limited time to make/save money.
This is a very good point; Finances definitely start to look differently when you are approaching the end of your regular earning years. I can understand feeling like you are approaching a big black hole!


To us, "afford" definitely falls in line with not disrupting the status quo. Everything else must be taken care of first- like DS said, all savings and emergency funds tended to first.
 

packrat

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We still wouldn't have our kids if we had to take care of savings and retirement etc first. We've been kicked in the teeth so many times as to be laughable. Oh, we managed to scrimp and save up $300! Yay! Now blahblahblah happens and we need $1800 to fix it. Perfect. Whew, got that taken care of..now we can get back to sav..whaaat is that noise? Is that a pipe leaking? Great..Oh that pain you've been having requires an Xray? Well that's awesome b/c I have to go in for surgery and my hours at work just got cut.

After a while we threw our hands in the air and said feck it.
 

kenny

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tyty333|1464292406|4036588 said:
That's a tough one because in reality we can "afford" a lot of things but we have retirement looming in the next 10 years
and I feel like that is a big black hole. We have been saving for retirement for a long time but to me it still doesnt matter
how much we have, I always question "will it be enough"? My MIL is in a lovely retirement home which is $3500 a month.
That's a pretty typical fee. That, with all her medical bills (fallen 3 times in the last couple of years causing months in
nursing homes) eat up a lot of money so I worry about things like that happening that you dont really plan for.

So "afford" has a lot more meaning to me then can we pay for it without it affecting anything (status quo as mentioned above).
Afford also brings to mind "do I/we need it"? How much do I want it? How much satisfaction will it bring to me? These are
tougher questions for me to answer than do we have enough money to get it without it affecting anything. In the long run I never
want to be in need or have to rely on my kids. I think it's easier for younger people to define "afford" than it is for someone
near retirement who has limited time to make/save money.
Your post brings to mind a wonderful quote, "I have enough money to last me the rest of my life, unless I buy something."
Jackie Mason
 

susief

Shiny_Rock
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Dec 2, 2011
Messages
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Afford = what I feel comfortable spending on something.

We do it backwards - buy what we need and want, and save whatever is left. As we both naturally have simple tastes, this means we live well beneath our means and have healthy savings built up, without feeling deprived. The trick is not wanting too much ;-) For example, we could easily "afford" to live in a larger house, but this one is big enough so why would we?

This is a really interesting thread.
 

ZestfullyBling

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1,976
Interesting topic.

If we cant pay cash its not worth having. We keep our bottom line (mortgage and car) low to have disposable income to purchase and do things we enjoy with cash without touching the savings. We only use credit cards for gas.
Basically if we cant pay for it in full with cash. It aint gettin got.
 

Dancing Fire

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diamondseeker2006|1464279447|4036539 said:
Before we spend on luxuries, first comes emergency savings, retirement savings, college savings for kids, unexpected expense savings (like car repair and that kind of thing), car savings accounts (we have paid cash for new cars for about the last 35 years). Our only debt is a mortgage. I wasn't buying $30k diamonds during the years we had kids in braces and paying for college, although we had a break and have the last one in college now. No college loans for any of our kids, either. So extra money beyond all those things can be used for luxuries.
Education is more important than diamonds??... :confused:
 

diamondseeker2006

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Dancing Fire|1464311663|4036709 said:
diamondseeker2006|1464279447|4036539 said:
Before we spend on luxuries, first comes emergency savings, retirement savings, college savings for kids, unexpected expense savings (like car repair and that kind of thing), car savings accounts (we have paid cash for new cars for about the last 35 years). Our only debt is a mortgage. I wasn't buying $30k diamonds during the years we had kids in braces and paying for college, although we had a break and have the last one in college now. No college loans for any of our kids, either. So extra money beyond all those things can be used for luxuries.
Education is more important than diamonds??... :confused:
:lol:

I am not exactly sure about that at this point. One is using the degree and one is not, and the third one is majoring in art. But we both had the opportunity to go to college without any debt, and it was important for us to do that for our kids. And if we have the means, we will help contribute to our grandchildren's college accounts, too.
 

AGBF

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dk168|1464295278|4036618 said:
I go with my dad's advice - if I have to ask about the price, then I cannot afford it.
People must vary. My husband has never spent a penny without first asking the price of the item or service on which he was about to spend it. It has driven my daughter and me mad over the years to hear him reply to, "Can she join the Y?" with "How much does it cost?" even after we have ruled out all the expensive gyms, etcetera.

AGBF

PS-I do realize that joining the Y might be beyond the means of many families, but my daughter belonged to the Y before with a student membership (to which she is still entitled) and it was easily within the range of what we could afford. He just had to ask now because he didn't remember exactly what we paid two or three years ago.
 

pricescopenewbie

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I am quite conservative "afford"-wise. I will faint if I have more debts than I can pay on a monthly basis.

and you have a good point that "afford' means differently to people based on her/his priority.

to me, things I do and don't want to throw my money on at this stage are:
do's - kids' education, kids' necessities, housing, investments
don't - cars (never into cars, wont feel happier in a benz than a toyota), luxuries (would rather carry a purse that I don't care if it is dirty or broken), travelling (will do more when kids are bigger)
as for diamonds, it is a passion but there is always a little me inside holding me back from spending on them as soon as I think how many diapers and toys that money can buy me.

these things change though over time. when kids grow older and we are financially stronger, I might get myself a huge stone so heavy that i cant lift my finger - dreaming of that day coming every night!
 

Jambalaya

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What an interesting thread.

There is so much of psychology tied up in money. I talked to someone once who was very comfortable (to give an idea, net worth of approx. $2m at age 74 with frugal lifestyle and house paid off) but the person was convinced their money would not last five years, and was really worried. It was a bizarre conversation.

What you can afford partly depends on your projected lifespan. Some people need to budget for forty years more of living expenses than others. I know there is no crystal ball, but when generations of your family die on the young side, you figure that you might as well sparkle while you can and hang the expense. I'm the oldest woman in my family on my mother's side, and I'm not even that old.

Off to look at the online holiday bargains! :D

I know we're not allowed to mention the F word on here, but that "real" lead crystal really cheers me up!

Yeah. As you can see, I don't think that much about affordability. I just go with the flow. I figure that I'll liquidate if or when my genes start to self-destruct! :lol:

You can see what I mean about psychology. For me, affordability is very much about longevity. Other people might be planning to have four kids, or someone else might have the aim of traveling as much as possible throughout their lives. I think affordability is very much about priorities as well as about your own unique experience of life. I never worry about having to provide for myself at ninety, for example.
 

Laila619

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Really depends on what it is. DH and I are doing well and we have no mortgage. Yet we have 4 kids to raise and put through college, so even though we are comfortable and we have no debt, I still don't feel like I can 'afford' luxury purchases, at least not at this time. I think the money could be better spent elsewhere.
 

Dancing Fire

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Laila619|1464319492|4036773 said:
Really depends on what it is. DH and I are doing well and we have no mortgage. Yet we have 4 kids to raise and put through college, so even though we are comfortable and we have no debt, I still don't feel like I can 'afford' luxury purchases, at least not at this time. I think the money could be better spent elsewhere.
Like more blings!... :wink2:
 

marcy

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Re: What does "afford" mean to you?

Like many have said already I think we can afford it if we can pay cash for it. Things like our house, cars are financed but anything else I don't feel I need it if I can't buy it outright and also that it doesn't cut in to our usual budget for expenses.


Marcy
 

Jambalaya

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Diamondseeker - you mentioned five different types of savings accounts that come before bling, plus college for the kids and possibly the grandkids. I don't think I could ever be that disciplined. I think you've really earned that 30k ring over the years!

I think "afford" is also defined by what other things you spend on. I'd never want a large data plan, a Starbucks habit, the latest car or a complicated, large house (landscaping, maintenance, etc.)

I'm amazed at the amount of money people spend on laundry and mani-pedis. I know quite a few people who send their laundry out, and they tend to be people in their twenties! I can't imagine not doing it myself, except drycleaning for the occasional special item. And I have a friend of 12 years' standing who has gotten a manicure every week for 12 years. Her nails always look freshly done and she wouldn't dream of doing them herself. I mean, fine if that's what she wants to do, but it seems a waste to me. How much is it - $20 per week? So about $12,500, on manicures, and she's got 2-3 decades left, probably. And she was probably doing it before we met, too. We're talking about 50k spent on manicures over 45 years, and that's a conservative estimate because I've a feeling it might be more than $20. She would say she couldn't afford bling but....if she painted her nails herself, she could!
 

Jambalaya

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part gypsy|1464289537|4036579 said:
Afford has different meanings to me depending on what it is.
I think I can "afford" to send my youngest to private school, which means going into debt (a few thousand) for it, because it is very important for her to get specialized help for her learning disabilities and am willing to have short-term debt or even some sacrifice to make it happen. I may say I can't afford say a piece of jewelry, even if I have more than that in savings and no other debt besides a mortgage, because I feel that money is only for emergencies or are earmarked for more basic things/future replacements. I would need an excess to feel I could "afford" it.

I had a friend from the northeast. To me she was well-off and comfortable and didn't have to worry about money. However she was shocked I would buy myself say a 1K ring and said she wouldn't feel comfortable spending that much on herself. At the same time she was OK buying new vehicles, remodeling her house, or paying for expensive lessons/schooling for her children, all of which as more expensive than a ring. For me I would find it very hard to buy a brand new car, even if I had that amount in savings and could buy it in cash.
Oh yeah, I know people like that. They're basically people who are just allergic to jewelry - well, allergic to the cost of jewelry even though they could afford it. I find it difficult to hear a sharp intake of breath from a person at my $200 earrings when that person spends many thousands on foreign vacations. It's almost as if, because they wear ultra-cheap bead or plastic jewelry and aren't tempted by the real thing, they're a better person somehow! I do give money to charity, but I think that life is for the living and money is for enjoyment. I'd also never buy a brand-new car.
 

Rockinruby

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Interesting thread. I'm enjoying the variety of responses. Good food for thought. :dance:

I plan to ask DH about this tomorrow. I'm curious how he would define "afford" for our situation. I think we put what we can "afford" on our credit card each month. I think it's defined by what we are absolutely sure we can pay off at the end of the month. That card is for point earning, etc.

We do have savings categories similar to what Diamondseeker mentioned. One savings for serious emer/car/house and another one for savings if we need to get an appliance or something. I have also kept a separate one for years that has savings set aside for animal emergencies. I don't want to be in a position where I could save my pet, but not have the funds. :nono: Probably not a necessity for most people, but very important for me personally. Also, I've done the 52 week challenges for extra funds for CS or loupe troop splurge. I guess I feel I can afford it if I have the money specifically set aside for it first. :dance:
 
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