I know, I know, it’s way more fun to buy what you want rather than what you can afford. However, if we’re trying to get on some stable financial footing we’re going to do the boring option and stick with what we can actually afford … and not bust the bank in the process.
By making some solid financial decisions throughout our lives, we can have a lifetime of financially security rather than periods of no money freak outs. I’ve been there, and I know how terrible they are.
Click through for 7 things you need to really think about affordability-wise before you start spending that money…
Your First Home 1 of 7
When you look at buying a home, you have to consider a lot more than the purchase price. First-time homeowners will have more financial responsibilities than they may be used to, so making the right decision on the right home should involve many factors. Don't forget about including insurance, taxes, repairs, and day-to-day expenses in your calculations.
Image source: GViciano
A Brand New Vehicle 2 of 7
Many people like the reliability of a brand new vehicle. There are a lot of new vehicles with reasonable sticker prices, but buying a pre-owned, certified model may be a better option. Buying a large vehicle also may involve the higher expenses associated with maintenance, repairs, and fuel.
Image source: Tom Wolf / Photography
Your Technology 3 of 7
Having the latest and greatest phone and computer technology can cost you big time. It may be more financially viable to buy used devices or wait a few months before investing in the latest technology trends. Just because it exists doesn't mean you have to have it right now.
Image source: Ed Yourdon
Your Bank 4 of 7
Banks have been adding different kinds of fees for services that used to be free and are increasing the price of traditional fees such as those related to checking accounts, ATM fees, and the like. If you have remained loyal with one bank, make sure you know what you are paying for each month by reviewing statements carefully. Many bank customers may find it costs them more than they thought to keep open bank accounts.
Image source: HowardLake
Your Credit Cards 5 of 7
Credit cards can be helpful to your financial life, but there are also some drawbacks. If you are paying bills late or exceeding your credit limits, your credit cards may be costing you more than you can afford ... especially in interest charges. Ideally, you should charge only what you can afford to pay off in full each month.
Image source: Images_of_Money
Your Commute 6 of 7
If you have to drive quite a few miles to get to work every day, you already may realize what gas is costing you. You also need to consider the wear and tear costs of your vehicle. Consider carpooling or finding work closer to home.
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Your Job 7 of 7
In addition to your commute, you may also be spending more than you can afford going to work each day. If you make a morning coffee run, eat lunch out every day, and have to foot your own bill for work-related expenses, you may be earning a paycheck just to be able to go to work. Cut back on unnecessary spending by brown bagging your lunch and discussing work expenses with your employer and your accountant at tax time for possible deductions. Save your receipts.
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