Be Suspicious of the Word “afford” to Maintain a Balanced Budget
How much can you afford to spend on what you want? It depends on how you define “afford,” and many paths to financial ruin start with redefining the word.
As the Millennial Money Man personal finance blog points out, the most ideal definition of what you can afford is “what you can pay for in cash right now.” However, many of us have to forge this definition to get by. When you buy a car or a house, your definition is: “I can afford monthly payments.” Credit cards can convince you that the definition is “I have enough space before I run out of my credit limit.” However, every time the definition of “afford” moves away from the cash you have, the easier it is to end up wrap yourself up financially:
The word “afford” really put people of my age in financial hardship early on. It’s a pretty innocent word, but it can cuff you as quickly as you can sign your name on a piece of paper or swipe a card. I’m horrified by this word, and I think you should be too. Every time you are told that you can “allow” something, you are being lied to.
Of course, the author goes on to point out that sometimes you can’t help but pay for something that you don’t necessarily have money for (houses and cars, as prime examples). Even responsible financial decisions can start with some amount of debt. However, this is always a more risky step than paying in cash. The next time you’re tempted to say that you can afford something you can’t pay for out of pocket right now, answer a little suspiciously. The word “afford” can not always be trusted.
Afford is a dangerous word | Millennium Money Man via Rockstar Finance