Your Personal Affordability Factor

So the real affordability factor that concerns you is not what the bank says you can afford, but what you know in your heart you can.

First you have to tot up all your regular outgoings, including allowing for those things that make your life worthwhile and let you to feel that you aren't just another member of the rat race.

This means counting what you want to spend on your hobbies or collections, on regular items like gym membership, movies, weekend trips, the latest car magazine or novel by your favorite author, visits to coffee shops with friends, as well as those other little impulsive purchases that add zest to a dull day.

All of these, which are often not counted when you enthusiastically set out to prove to yourself that you really can afford something, simply must be included, unless you want to live the life of a hermit and enjoy your new purchase in complete isolation and poverty.   

Supposing you decide, after all this, that you really can make the leap to ownership of this much-desired object. Before you rush off and sign on the dotted line, you need to remember what we talked about before: you might be able to afford the purchase now, but what about next week or next year?

That car you really want, and can see yourself whizzing around the neighbourhood in, how much is it going to cost to run? Because you're not just going to leave it parked outside the door and walk to work, are you?

There are, among these sums, other more pleasant things to be considered before your final decision is made.

Your new purchase might actually save you money in some areas of your life. In other words, you can get a return on your investment in this item which makes it worthwhile.

Examples of this would be if a new car meant fewer outlays on repairs than with your old one, or saved you bus fares, or made it possible to take a higher-paying job further away.

Unfortunately, you would need to be very certain of these returns before they would tip the balance in favour of the purchase if it's looking too costly otherwise.