What does "affording" something mean to you?

[budman]

Budman be a Cashman too.

Became much easier after getting through 10 years of racing recovery. Never been so broke, but before recovery so happy.

 

[cheez]

Jesus. A 30 year loan for a trailer? I’ve heard of crazy people doing 10 year loans for cars they probably can’t afford, but 30? Surely you mean 36 months?

I know that there’s always a “shit happens” factor with everything. Getting into a car loan or whatever based on an income level of xx, and if that income suddenly drops or is gone, now you’re stuck with a monthly nut you can’t make. But that’s not what I’m talking about. I’m talking about instead of just stroking a check to buy a car, keeping the money in reserve to let it make more money for you, and carrying a note at a decent interest rate. If the “shit happens” moment happens, I’ve got the money to cover the debt anytime I want. Last year we got an new Tempurpedic bed. And it was stupid expensive. I have the cash on hand, but they gave me 0% for 48 months. Why wouldn’t I take that? I get that it can feel uneasy to be indebted to someone and/or it’s a small hassle to worry about a bill every month. But multibillion (trillion even) dollar corporations carry cash on hand and manage debt all the time.

No, it was a 360 month term. 12 months in a year makes that 30 years.

Apparently that's the 'normal term' in travel trailer financing agreements.

Multibillion dollar corporations have less anxiety than I do.

 

[ejv]

I am in the process of buying a new vehicle. It will be the most expensive thing I have ever purchased that is unlikely to appreciate. I have the funds to pay it outright. I've thought of doing it. I like that idea but at the same time my wife likes to see the money sitting in the bank doing nothing but becoming worth less as inflation soars (literally makes about $.40/month compared to a guy I work with making about $29/month on a very similar amount in his credit union). Helps her sleep at night. So we will meet in the middle. I'll probably end up putting $30-40K down.

We could afford a house around here and many think we are crazy to not buy but neither of us are enamored with spending $1.5-2.5M on a home and having to stop investing in our retirements to do it. The happiest people in retirement have the highest incomes not the most assets. So at this point I would rather buy income producing rental properties than own a home we feel is stupidly overpriced in an area we won't be retiring in.

 

[TheRobSJ]

No, it was a 360 month term. 12 months in a year makes that 30 years.

Apparently that's the 'normal term' in travel trailer financing agreements.

Multibillion dollar corporations have less anxiety than I do.

30 years. I guess since it can be used as a residence, perhaps that’s why they do terms like a mortgage? I wonder if they do that for stuff like a big ass motorhome. Some of those giant diesel pushers with the pop outs and all that cost every bit as much as a house.

 

[buellistic]

30 years. I guess since it can be used as a residence, perhaps that’s why they do terms like a mortgage? I wonder if they do that for stuff like a big ass motorhome. Some of those giant diesel pushers with the pop outs and all that cost every bit as much as a house.

And sometimes more..Lots more!....

 

[bikewanker]

I tell myself I can’t afford that new motorcycle that gives tingles up and down my… but it really means I’d have to thin the fleet to make room and don’t really want to spend the money. I splurged after health scare and surgery a few years ago when I rationalized that I needed a nice car and a road trip. Financed and accelerated the pay off. Still like the car even though my 25 year old truck runs just fine. A couple years into retirement and I’m feeling better about spending my savings.
ejv, the equity in my home might be 30% of my assets but since I like living there it doesn’t really do anything for me except some bragging online.

 

[HappyHighwayman]

For the past 10 years I've used a balance sheet at the end of the year to see my net worth, and then I create a cash flow so I know where the money goes, and I reconcile it and try and improve the next year.

So basically if it doesn't blow my cash flow, or I budget it for it, I can afford it. I have a mortgage and currently a solar loan, but I consider those as improving my net worth over time. If I bought a $50,000 car that had $1000 monthly payments I could probably "afford" it but I'd have vastly less cash flow.

Hard question to answer. It depends if the item is "good" for me in the long term, like repairs, home improvements, or money saving things vs. "toys" "knick knacks", "high end alcohol" and "unnecessary restaurant dinners".

 

[Killroy1999]

Need to buy things with cash even if there are cheap loans out there.

 

[JesasaurusRex]

No, it was a 360 month term. 12 months in a year makes that 30 years.

Apparently that's the 'normal term' in travel trailer financing agreements.

Multibillion dollar corporations have less anxiety than I do.

If you think cars are bad at holding their value lol. Things start falling apart as soon as you pull it off the lot too.

 

[Eldritch]

This has been a question of mine for years. Both regarding my own finances, and people I know.

I often hear people say "I can't afford that". What does that mean? Does it mean you:
-Can't buy it cash?
-Can't qualify for a loan big enough to purchase it?
-Can't sustain the monthly payments given your current income?
-Shouldn't buy it because at current savings rate, income rate, age, life expectancy, and retirement plans it doesn't seem like a wise choice? (Highly subjective)


I've had a friend tell me he can't afford a new computer, while sitting on $100k in the bank.

And I've had a friend buy a $70,000 truck who only have $10k in the bank.

In general, most people I know are sitting on heaps of cash/investments but are still very cheap and complain about money because they're conservative and thinking about some distant financial goal.


So... what does it mean to you? What goes through your mind, and at what threshold do you consider maybe some calculations are required?

I mean, affording it simply means that. If you can pull off the deal or not, be it a full tank of gas or a new home.

Everyone has different financial goals, different amounts and sources of income, different debt responsibilities and different comfort levels with risk.

If they say they cannot afford it, that means it does not fit within the confines of these different competing priorities of the individuals agenda.

If you think cars are bad at holding their value lol. Things start falling apart as soon as you pull it off the lot too.

Y'all ever had a boat?

 

[TylerW]

For me, the affordability of an object has a great deal to do with what kind of return I can expect on the investment. I don't make much money with woodworking so even a modest Tablesaw at $700 seems very expensive to me. Meanwhile a $3000 camera seems ridiculously cheap because I can make a return on that very quickly.

The return I make on my investments doesn't need to be monetary, either, but that's a much more complicated decision matrix.

 

[CRUZer]

"Can't afford it" means the wife said no.

 

[DonTom]

Yes, this. Spending decisions are much easier when you (and your partner if you have one) have a budget.

IMO, personal budgets are BS. How can you know what unexpected emergency comes next? Or worse yet, several expensive ones all at the same time.

-Don- Reno, NV

 

[nakedape]

For the past 10 years I've used a balance sheet at the end of the year to see my net worth, and then I create a cash flow so I know where the money goes, and I reconcile it and try and improve the next year.

So basically if it doesn't blow my cash flow, or I budget it for it, I can afford it. I have a mortgage and currently a solar loan, but I consider those as improving my net worth over time. If I bought a $50,000 car that had $1000 monthly payments I could probably "afford" it but I'd have vastly less cash flow.

Hard question to answer. It depends if the item is "good" for me in the long term, like repairs, home improvements, or money saving things vs. "toys" "knick knacks", "high end alcohol" and "unnecessary restaurant dinners".

I bought a car in Jan 2020. What wasn’t apparent at the time of signing was we would instantly realize $800-1000 savings monthly soon after by not eating out for two years. Really. A handful of take outs.

Already increased my pay by $1000 per month in anticipation of the car payments and insurance uptick but the food savings was so apparent. And fuel costs. And and. Getting a $15K dental bill stretched over 2022 was meh whatever. Then getting a dual sport for $5K while the Multi gets a $5K top end rebuild. What reconciled that cost? No vacation 2 years.

Free lodging for east coast and Europe trips? Business class flights. No more suffering. That’s how we “afford” stuff that matters.

 

[HappyHighwayman]

Exactly. Decide what is most important.

 

[JesasaurusRex]

IMO, personal budgets are BS. How can you know what unexpected emergency comes next? Or worse yet, several expensive ones all at the same time.

-Don- Reno, NV

Budgets allow people who's income isn't high enough to be able to save for the unexpected expense should one pop up. I personally have a spreadsheet with monthly/annual expenses on it that I probably look at and update once per year. It's far from as indepth as it probably could be but it's better than nothing. Shows you how quickly all the stupid little shit adds up and let's you reevaluate needs, wants, and don't really wants anymore. Theyre useful for making ends meet for some and combatting lifestyle creep for others. I suggest you make one, even if it's just as basic as mine. They don't take much time to throw together. Templates are already out there.

 

[cheez]

IMO, personal budgets are BS. How can you know what unexpected emergency comes next? Or worse yet, several expensive ones all at the same time.

-Don- Reno, NV

Yes, that impacts your budget negatively. You should still have one. What you just described is driving without a route in mind. "How can you know a street won't be closed? There could be several closed streets! How can you pick a route?" Well, you can, and when you reach that closed street, you find the detour. It impacts your route, but you still get to where you're going a lot more effectively than if your route planning is "meander aimlessly until I'm at the place I wanted to arrive"- because that usually means you don't reach your goal (retirement) at all.

You Need A Budget.

 

[wazzuFreddo]

Can't afford it means I didn't allocate cash in the budget for it.

 

[MC BumSlap]

"Can't afford it" means the wife said no.

 

[DonTom]

Budgets allow people who's income isn't high enough to be able to save for the unexpected expense should one pop up.

But how do you even get a clue of how much your next unexpected expense will be? What happens when it is more than ten times of what you allowed for? And right after that, another, close in time? It seems to me they pop up fairly often.

And sometimes trying to save money can cost more. Such as having too high of a deducible on auto insurance. I only mentioned this because I now have a cracked windshield on my Tesla. It costs the same to repair as my high deducible, which means I have to cough up the ~$2,000.00 myself to get it fixed.

-Don- Reno, NV