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Can I Afford It?

Can I Afford It?

“Can I afford it?” is a natural question to ask before making a large purchase, but I try to take it a step further.

For example, if I’m going to be taking a trip, I take a look at things beyond the cost of plane tickets and hotel rooms. There’s also spending money, meals, and the little unexpected expenses that always seem to crop up. Sometimes there’s also the cost of missed work or lost income to take into consideration.

If I’m going to be buying a physical item, I try to take all of the costs associated with owning the item into account. Sometimes it’s not the item itself that’s expensive, but the fees that go along with this.

A good example of that is the “free” cell phone you can usually get by signing up for a two-year contract. How much will that free phone really cost you? Is the service still worth it to you when you look at the cost as a whole? Are there any other associated expenses to take into consideration? (Insurance, accessories, etc.)

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Finally, there’s opportunity cost. What else could you be spending the money on instead? What will you be giving up by making this purchase?

“Is it really worth it to me in the long run?” is a great question to add to “Can I afford it?”.

View Comments (4)
  • You make a very good point. I sometimes end up buying things because they are cheap without thinking about whether they will be of any use to me in the future. We should learn to look at the big better when we make purchases.

  • I agree. This “free” gimmick works well for business but defeats our purpose to save. We are actually wasting our money if we are lured into buying an item just because something comes with it for “free” but end up realizing that we don’t need this free item at all much less use it.

  • I too often buy things because they’re “cheap.” However, the fact I haven’t purchased it when full price surely says that I don’t need it? Tough really. But a good point.

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