Don’t Ask, “Can I Afford It?” Instead, Ask, “Can I Afford It?”
Just because you have money for something in your account – or room in your budget for monthly payments – doesn’t necessarily mean it’s a good idea.
The difference between “should” and “should”, in addition to preventing possible dinosaur-related disasters , is key to creating a financial plan that is sustainable over the long term. As personal finance site Wealth Redesigned explains, your financial well-being is largely determined by your habits. Rather than approach the purchase or financial decision in terms of whether you can do this, ask yourself whether you should:
Making larger buying decisions with a buffer mindset can be tricky. It is not a question, “Can I afford it?” because if they wanted to, these people could probably write a check or arrange funding. This is the question: “Can I afford it?” What will this big vacation, car makeover or bathroom makeover do for the bigger financial picture?
By filtering your purchases through the “should” filter, you can better understand your overall finances. Sure, you can buy a new tax-refundable laptop even if your old one works just fine, but you’ll probably be much happier in the long run if you invest that money in credit card debt.
Should I afford it? | Wealth Changes via Rockstar Finance