How much can I afford?

This is a question that unfortunately is often times asked in relation to monthly payments. Many people feel that if they can get the payment small enough to fit into their available monthly income, they can afford the item they desire. The problem with this philosophy is that if you are basing affordability strictly on monthly payment you are sure to find yourself stretched too thin when an emergency occurs. Years ago when our grandparents were starting their own families, buying something meant you actually had the money to complete the purchase at the time the item was brought home. Today with 90 days same as cash, 0% financing and a plethora of other financing options, to “buy something” means something completely different that it used to mean.

One item that is often purchased this way is your automobile. When most people go to the dealer they have a specific amount in mind that they are willing to pay each month for the car. When you “shop” with only a monthly payment in mind, you could end up buying a more expensive car than you should simply by allowing the dealer to work you into a 60 or 72 month loan. The NADA estimates the average car payment in the United States is around $400 a month over 60 months. Do you really want to commit that much money, $24,000, to an item that begins depreciating the moment you own it?

The next time you ask yourself whether or not you can afford a specific item, check your wallet. Do you have the money in there to purchase the item? If not, and you don’t have it in the checkbook either, then have some patience and wait. Save up the money necessary to actually purchase the item. When you don’t have a payment attached to the item, you can enjoy it much more. Before you begin to think this is an impossibility, check out Luke 14:28-30…God doesn’t recommend a payment plan either.