Friday, May 1, 2009

How Do I Know What I Can Afford

Don’t buy stuff you can’t afford…sounds pretty simple, right? Have you seen the Saturday Night Live skit? “If you don’t have any money, you should not buy anything… mmmm.” If this concept is so simple, why do we have millions of Americans in millions of dollars of debt? Are we all just greedy? lazy? stupid? I don’t think so. I think most people have no idea what they can and cannot afford.

How do you determine what you can and cannot afford? Here are some answers I’ve heard:
  • I call the bank. If the money’s in there, I can afford it. If its not, I can’t.
  • People with good salaries can afford whatever they want. People with bad salaries can’t.
  • I buy everything on sale.
  • I look to see if I have room on my credit card.
  • People who have nice things – a nice car, live in a nice neighborhood, have a good education – they can afford expensive stuff.
The truth is all these answers are completely wrong.

One of the biggest money myths we have in our society is the belief that people with more money can afford things and people with less money cannot. Think about it. If you make 100K a year, drive a fancy car and live in a nice house, your money will probably be going to pay for the car and the house. Realistically you can have less money in your pocket after paying all your bills than someone who makes $10 an hour, takes the subway to work and lives with his parents.

However, most of us don’t look at all our expenses when trying to figure out what we can afford. We look at our income, our assets, the item we want to buy, the amount of money we can borrow, our mood or feeling at the time, and other things that have nothing to do with issue.

How do you determine what you can afford? You do the math! You add up all the money you plan to make and subtract all the money you plan to spend. The amount left is what you can afford to spend. Does that sound simple? It is, but most people I know have no interest in doing this. In fact, a lot of people are downright terrified to do this.

Many of us have a pretty good idea what we plan to make, but how are you supposed to know what you plan to spend? Well, keeping track of what you’ve spent in the past is a huge indicator in determining what you’ll spend in the future. But many people not only don’t like to track their spending, they don’t want to. But if you’re ever going to know what you can afford, you have to know what you’re going to make and what you’re going to spend. Some people call this process creating a budget (aaarrgh, I said a scary word!).

Our society is pretty much designed to not encourage people to think this way. Most of the money we loan to people is loaned without asking anything about their expenses. We ask people what they make, what they have, we look at their credit, and then we give them more money and stuff. Whether they can afford to pay us back is assumed. We assume if someone has a lot of money, they can afford to have more stuff.

This is exactly why we're in the economic crisis we are in today. We need to stop looking at income and assets as a basis for what we can afford. We need to teach people not to be scared to track their expenses. Only then can we expect to get out of this crisis and not return!

27 comments:

Anonymous said...

[url=http://welcome-casino.aoaoaxxx.ru][img]http://s49.radikal.ru/i125/0912/82/a90aea46452a.jpg[/img][/url]

[IMG]http://s44.radikal.ru/i105/0912/3d/c3f5c104cbf9.jpg[/IMG]

[url=http://welcome-casino.aoaoaxxx.ru][img]http://s51.radikal.ru/i133/0912/58/34c8f67efb7f.jpg[/img][/url]














































[u][b]We can be found by these keywords:[/b][/u]
[url=http://welcome-casino.aoaoaxxx.ru/sitemap.html]tropicanac casino atlantic city [/url]
[url=http://vegasonlines.net/east-casino.html]juego casino linea gratis [/url]
[url=http://vegasonlines.net/the-sun-casino.html]juego gratis de casino [/url]
[url=http://vegasonlines.net/imperial-casino-biloxi.html]borgatta casino atlantic city [/url]
[url=http://vegasonlines.net/sportsbook-casino.html]casino line game [/url]
[url=http://vegasonlines.net/caesars-casino.html]casino career centre temecula [/url]
[url=http://vegasonlines.net/tropicana-resort-and-casino-atlantic-city.html]solitario casino [/url]
[url=http://vegasonlines.net/city-argosy-casino.html]descargar juegos de casino para pc [/url]
[url=http://vegasonlines.net/online-casino-sign-up-bonus.html]jugar linea no casino [/url]
[url=http://vegasonlines.net/island-view-casino.html]casino logo [/url]
[url=http://vegasonlines.net/brisbane-casino.html]bogota casino atlantic city [/url]
[url=http://vegasonlines.net/aruba-beach-resort-and-casino.html]casino descarga portal internet [/url]
[url=http://vegasonlines.net/red-wind-casino.html]banquete casino santander boda [/url]
[url=http://vegasonlines.net/treasure-island-casino.html]casino apuesta deporte [/url]
[url=http://vegasonlines.net/casino-funchal.html]juegos de casinos gratuitos para bajar [/url]
[url=http://vegasonlines.net/watch-casino-royale-divx-online.html]vegas horseshoe casino [/url]
safe online casino
[b]tropicanac casino atlantic city[/b]
juego and casino and internet and ruleta
mayaguez mayaguez resort casino
[b]casino tragaperras[/b]
casino babe image
[u]online casino bonus gratis[/u]
casino real estate
casino ganar maquina
[b]ocio juego casino[/b]
casino de la policia nacional
casino de aranjuez

Anonymous said...

Good day, sun shines!
There have been times of hardship when I didn't know about opportunities of getting high yields on investments. I was a dump and downright pessimistic person.
I have never imagined that there weren't any need in big initial investment.
Now, I feel good, I started take up real income.
It's all about how to select a proper partner who utilizes your money in a right way - that is incorporate it in real deals, parts and divides the income with me.

You may get interested, if there are such firms? I have to tell the truth, YES, there are. Please be informed of one of them:
http://theinvestblog.com [url=http://theinvestblog.com]Online Investment Blog[/url]

Anonymous said...

Amiable fill someone in on and this mail helped me alot in my college assignement. Thank you as your information.

Anonymous said...

Easily I assent to but I dream the list inform should prepare more info then it has.

Anonymous said...

[url=http://seghan.ru/go.php?sid=2][img]http://banners.servized.com/current/gif/tam_720x90_1.gif[/img][/url]

[url=http://old-drugstore.net/]What is/are Zovirax Tablets?[/url]
What are acyclovir tablets or capsules?
ACYCLOVIR (Zovirax®) treats unerring types of viral infections, specifically herpes infections. Acyclovir
will not medicament herpes infections; it desire help the sores rejuvenate faster and eschew to mitigate the pain or discomfort.
Occasionally acyclovir is conceded to helper bar the infection from coming back. Acyclovir also treats shingles
and chickenpox infections. Generic acyclovir tablets and capsules are available.

What should I communicate my well-being mindfulness provider in front of I crook this medicine?
They destitution to differentiate if you have planned any of these conditions:

•dehydration
•neurological disease
•kidney disease
•seizures (convulsions)
•an bizarre or allergic resistance to acyclovir, ganciclovir, valacyclovir, valganciclovir, other medicines, foods, dyes, or preservatives
•in the pudding club or disquieting to secure gravid
•breast-feeding



[url=http://best-drugstore.aoaoaxxx.ru/][img]http://i079.radikal.ru/0910/b9/3f666eb40896.jpg[/img][/url]
























[url= ]cheapest Zovirax onlineorder Zovirax saturday delivery [/url]
buying Zovirax without a prescriptionZovirax perscription on line
[url= ]Zovirax buy fedexZovirax cod shipping [/url]
overnight Zoviraxcod Zovirax for saturday
[url= ]Zovirax free consultationbuy Zovirax without a prescription online [/url]
Zovirax xr onlineZovirax on line cash on delivery
[url= ]buy Zovirax online consultation uscash on delivery online prescriptions Zovirax [/url]
Zovirax overnight fedexZovirax pharmacy cod saturday delivery
[url= ]Zovirax without prescription overnight shippingorder Zovirax without prescription from us pharmacy [/url]
buy Zovirax with codZovirax cod no script
[url= ]uy Zovirax for cash on deliverypharmacy Zovirax no prescrption [/url]
Zovirax online overnight delivery codonline us pharmacy Zovirax
[url= ]Zovirax cheap no membershipprescription Zovirax cod [/url]
where can i buy Zovirax no prescriptionZovirax free overnight fedex delivery
[url= ]Zovirax no rx codZovirax without rx [/url]
Zovirax free shippingno prescription required for Zovirax
[url= ]non prescription cheap ZoviraxZovirax discount fedex no prescription [/url]
Zovirax cod saturday deliveryZovirax without a prescription or doctor
[url= ]purchase Zovirax uk deliverybuy Zovirax without rx [/url]
Zovirax deliver to uk fed ex overnightZovirax cash delivery

Anonymous said...

[url=http://seghan.ru/go.php?sid=35][img]http://i066.radikal.ru/1001/38/f22daff34e6d.jpg[/img][/url]












[url=http://mitglied.multimania.de/mfoyjqw/]age limit to buy cigarettes [/url]
buy cigarettes online free shipping will smokers buy price value cigarettes buy saratoga cigarettes on line
[url=http://mitglied.multimania.de/hnlgiui/]buy cigarettes in salamanca ny [/url]
buying cigarettes at age 13 buy cigarettes paypal buying cigarettes in italy
[url=http://mitglied.multimania.de/yaaysik/]cigarettes by money orders [/url]
where to buy tax free cigarettes clove cigarettes where to buy buy dunhill my blend cigarettes here
[url=http://mitglied.multimania.de/gdrzigo/]buy monarch cigarettes with credit cards [/url]
order cigarettes from indian reservation buying cigarettes online illegal buy cigarettes with check account
[url=http://mitglied.multimania.de/rehxicw/]buy german cigarettes online [/url]
buy plastic cigarette holder buy some candy and cigarettes lyrics buy marlboro cigarettes online nevada
[url=http://usuarios.multimania.es/cmvaule/]marlboro cigarettes buy marlboro online from [/url]
order cigarettes online us where can you buy rockets cigarettes buy cigarette box
[url=http://usuarios.multimania.es/fpazvmi/]buy electronic cigarettes wholesale [/url]
buy cigarettes from cigarettes online buying wisconsin monthly payments buy cigarette cases in

Anonymous said...

Ahaa, its pleasant conversation regarding this piece of writing here at this webpage, I have read all
that, so now me also commenting here.
Also visit my page ; piano lessons

Anonymous said...

Awesome article.
My webpage :: amphora pipe tobacco

Anonymous said...

My family always say that I am wasting my time here
at net, except I know I am getting familiarity everyday
by reading thes fastidious content.
Also visit my web site borkum riff pipe tobacco

Anonymous said...

whoah this blog is wonderful i like reading your articles.
Stay up the great work! You already know, lots of people are searching
round for this information, you could aid them greatly.
Feel free to surf my site :: drum tobacco

Anonymous said...

45 male jupiter dating http://loveepicentre.com/articles.php windsor seniors dating

Anonymous said...

Wow, awesome blog layout! How long have you been blogging for?
you made blogging look easy. The overall look of your website is
excellent, as well as the content!
Here is my webpage ... work from home jobs in maryland

Anonymous said...

This is my first time go to see at here and i am really impressed
to read everthing at alone place.
My web site - new usa online casinos

Anonymous said...

Howdy! Someone in my Facebook group shared this site with us so I came to take a look.
I'm definitely loving the information. I'm book-marking and will be tweeting this
to my followers! Superb blog and wonderful design.
my page > homepage

Anonymous said...

Hi! Do you know if they make any plugins to protect against hackers?

I'm kinda paranoid about losing everything I've worked hard on.
Any tips?
Here is my website ; Real Online Slots For Money

Anonymous said...

It is not my first time to pay a quick visit this web site,
i am browsing this site dailly and get good information from here everyday.
Visit my web blog ; play slot machines Online for money

Anonymous said...

I am regular visitor, how are you everybody?

This piece of writing posted at this web site is really nice.
My website: play slots online for real money

Anonymous said...

I really love your website.. Great colors &
theme. Did you develop this website yourself?
Please reply back as I'm looking to create my very own blog and would love to find out where you got this from or exactly what the theme is called. Appreciate it!
Take a look at my page :: immobilien in bodrum

Anonymous said...

Admiring the persistence you put into your website
and detailed information you present. It's great to come across a blog every once in a while that isn't the same old rehashed information.
Fantastic read! I've saved your site and I'm adding your RSS feeds to my
Google account.
My webpage - http://chat.iwebs.ws

Anonymous said...

[url=http://onlinemedistore.com/products/lynoral.htm][img]http://onlinemedistore.com/11.jpg[/img][/url]
cvs pharmacy mecedon ny http://onlinemedistore.com/products/dramamine.htm pharmacy compounding continuing education [url=http://onlinemedistore.com/products/frozen--energy-and-libido-enhancer-.htm]pharmacy tecnician salaries in texas[/url]
pharmacy metformin http://onlinemedistore.com/products/kamasutra-longlast-condoms.htm medco online pharmacy [url=http://onlinemedistore.com/products/finpecia.htm]finpecia[/url]
middletown pharmacy http://onlinemedistore.com/products/zanaflex.htm federal pharmacy law purchasing [url=http://onlinemedistore.com/products/pilocarpine.htm]us pharmacy rx[/url]
solar pharmacy http://onlinemedistore.com/products/quibron-t.htm diflucan and canadian pharmacy [url=http://onlinemedistore.com/products/aldactone.htm]aldactone[/url]

Anonymous said...

Hi, order carisoprodol - soma online no prescription http://www.ayuhyoga.com/, [url=http://www.ayuhyoga.com/]soma pills[/url]

Anonymous said...

12, [url=http://www.lunestasleepaid.net/]lunesta without prescription [/url] - eszopiclone no prescription - eszopiclone online http://www.lunestasleepaid.net/.

Anonymous said...

Give it time. Occasionally the recovery process from nervousness related problems are often very slow. Often you may not feel as if you will be making any advancement whatsoever. The important thing to this is to recognize that it requires time. When you look back within the months you will notice your advancement, and after a year, it is possible to see an important transform. [url=http://www.x21w12w21.info]Matgjjmony[/url]

Anonymous said...

Another quick way to lose fans is by using your Facebook Page for nothing but advertisements.

Certainly his nonchalant attitude appeals to some - he frequently uses any number of phrases
to make clear he doesn't care if you like him - but it hardly speaks for his likability. The 7th and last method is to make a powerful marketing.

Feel free to surf to my web blog; http://buyfacebooklikesnow.webs.com

Anonymous said...

Rather than publish long lines, split up your details employing bullet databases. Details are easier for anyone to skim via than big pieces of text message. Continue to keep each section short, no more than fifty or more terms. Readers will take pleasure in the benefit this affords when looking at your site posts. [url=http://www.xxxw12woo.info]cort5656e[/url]

Anonymous said...

Blogger: Start Money Smart - Post a Comment [url=http://www.cymbaltarxbuyonline.net/]buy generic cymbalta online [/url] buy duloxetine online - generic cymbalta no prescription - duloxetine price - http://www.cymbaltarxbuyonline.net/ [url=http://www.cymbaltarxbuyonline.net/] Generic For Cymbalta [/url] generic cymbalta 60 mg - Price Of Cymbalta - buy duloxetine [url=http://www.buyingtopamaxcheap.net/]buy topiramate online [/url] generic topamax - topamax without prescription - topiramate without prescription - http://www.buyingtopamaxcheap.net/ [url=http://www.buyingtopamaxcheap.net/]topiramate online [/url] topiramate no prescription - order topamax - buy topamax without prescription - http://www.buyingtopamaxcheap.net/

Anonymous said...

Blogger: Start Money Smart - Post a Comment [url=http://www.buystendrarxonline.net/]stendra online pharmacy [/url] cheap stendra - generic stendra - stendra cost - http://www.buystendrarxonline.net/ [url=http://www.buymaxaltrxonline.net/]maxalt cost [/url] maxalt for sale - maxalt no prescription - maxalt online - http://www.buymaxaltrxonline.net/ [url=http://www.prednosineonline4sale.net/] Cheap Prednisone [/url] buy prednisolone online - Buy Prednisone - buy cheap prednisone [url=http://www.prednosineonline4sale.net/]buy generic prednisone [/url] cheap prednisone - cheap prednisone online - cheap prednisolone - http://www.prednosineonline4sale.net/