What you can afford?

[C_Claycomb]

"Buy the best that you can afford."
and
"I need XXX but can't afford it."
and
"Put something aside for a rainy day"

So, how do you judge what you can afford? How do you judge if it is "raining"? I am not just thinking of purchasing more outdoor gear. There are lots of things that that we do that are based on what we think we can afford; cars, travel, medical expenses, housing, weekly shopping...

A couple of my friends were quite happy to run up debt (bank loans) to buy cars or go on holiday. One housemate was fine with buying beer every night and spending £10,000 on a Mini Cooper Works, while pleading poverty when it came to covering utility bills. Meanwhile my long term conditioning lead me to feel that I could not afford a once in a lifetime holiday opportunity (10 days in Namibia as a test client for a new company) because I had just bought a second hand car and I didn't want to dip into my savings. That was in 2005, and I kicked myself for that decision for years.

Recently I have been contemplating a number of potentially large expenses, the top ones being; my car is now 15.5 years old and starting to slowly fall apart, my house could do with some repair work that exceeds my abilities and time and I have a tooth that needs some serious dental work, probably replacement.

How do folk here figure out their budgets?

Cheers

Chris

 

[Van-Wild]

I go with the process of:

Can i afford it without loss of something else? Yes? Well buy it then. No? Don't buy it.

Can I save for it? Yes? Well save up then. No? Don't save...

But the over arching question is:

Do I really need it?


Sent from my SM-G903F using Tapatalk

 

[Woody girl]

I put a bit aside each week. Minimum of five pounds more if I can afford it. I also used to have an isa that I put a fiver a week into. I have a penny jar that I put any loose change into each evening keeping any pound coins and fifty pence pieces only in my purse. It soon mounts up. I don't have much to spare but I manage to afford most of what I want. I have recently given up the TV as I don't watch it much anyway and it started to play up so it went. That saved me over a hundred pounds a year in licence fees and electricity.
Grow some veg even if it's in pots. I grow potatoes carrots and beetroot salad crops etc in pots as well as a couple of small raised beds. Tomatoes are in hanging baskets. Eat seasonaly and cut out the crisps and choccy biscuits as everyday items they are treats. Shop at aldi and believe you can afford something and you will. Even if you have to wait a while.
When I've bought a vehicle I start to save immediately for its replacement even if that will be ten years down the line. Never had credit.. never will don't even have a credit card. It is possible. Talk to the old people they knew how to budget well and can give lots of tips on a credit free life and budgeting.

 

[Kepis]

Always ask myself two questions;

1) Do i want it - Y/N
2) Do i need it - Y/N

If i need it and cant afford it, then i will save up for it, until then i will go without unless its something i need for everyday life, like a new cooker, then i take the money out of my savings to pay for it.

I then pay it back into my savings either as lump sum if im a bit flush, or bit by bit over time, but its always paid back, i also have a little rule that when i pay it back, i must pay back more than i took out, that way my savings grow.

More often than not, the answer to question 2 above is "No", in a weeks time i've forgotten all about it and moved on to the next "want" item. Think the old phrase for it was "living within your means"

 

[Woody girl]

My grandpa, a tailor used to imprint the message, "cut your coat according to your cloth." The best bit of advice I ever had and one I live by daily all my life. No credit.. no debt. " Need versus want." Was another of his sayings if I ever asked for something he thought was unnecessary.

 

[sunndog]

I would put all those in the need catagory so its a case of prioity

tooth
House
Car
Is the reflex order i'd put them in

How i save is to Only keep just enough in my wallet and current account to last me the week/month.
then i try and save again out of that and whats left over goes in the frivolous toy fund

When is it raining? I'd say the longer it can wait the less its raining....you know when a monsoon hits

 

[shaneh]

How much do I want it?

Can I afford it?
How much overtime do I need to do to make purchase?

Is there enough overtime?
Who will I be working with? (it's a 12hr shift!)
Is THAT worth the purchase?

How big will the bollcking be from my Boss for doing too much overtime?
Will H.R be involved (again)?

Will the Wife notice the additional purchase?
How big will the bollocking be, from my Wife?
Will our Marrage Survive?

Depending on outcome of the above questions.

Purchase.

 

[santaman2000]

I would put all those in the need catagory so its a case of prioity

tooth
House
Car
Is the reflex order i'd put them in

How i save is to Only keep just enough in my wallet and current account to last me the week/month.
then i try and save again out of that and whats left over goes in the frivolous toy fund

When is it raining? I'd say the longer it can wait the less its raining....you know when a monsoon hits

Generally I agree with you. But the prioritization can be complicated. Yes, I need a house more than a car, BUT, most people need the car to keep a job to pay for the rest. I’m retired now so for me that decision is a little easier.

 

[bobnewboy]

Moderation in all things! I always buy mid range things when purchase is necessary, and always do extensive research, but:
- don’t gamble
- don’t use credit cards (I’ve never had one even though that apparently negatively affects your credit rating, whatever that is...)
- don’t borrow money in any way to buy a depreciating asset of any kind, e.g car
- do save regularly, even a very small amount so long as you can afford it - it’s a good habit to start and maintain
- do have separate savings for specific and/or more expensive items, e.g cars.

It all sounds a bit puritanical but this approach has stood me in good stead The ‘rainy day’ occurs when you least expect it, and that’s when you’re really in the doo-doo.

 

[sunndog]

Generally I agree with you. But the prioritization can be complicated. Yes, I need a house more than a car, BUT, most people need the car to keep a job to pay for the rest. I’m retired now so for me that decision is a little easier.

Aye that's why I said reflex priority. He didn't say his car is near to scrap so I put the house above....not enough need or info to quibble over the order, far too many variables to comment on

 

[Janne]

We buy as much as we can on a credit card. But, very important, the whole ’debt’ has to be paid every month, so no interest is ever charged.

The points we amass each year pay for one person flying from here to Bodö in Norway once a year.

An excellent saving?

 

[Macaroon]

I tend to look at most things the other way around, i.e. can I afford not to spend on this? So, footwear, bedding, dentistry, glasses and food get priority as do tools. I buy the absolute best I can afford in all those categories, and will do without other stuff to pay for them. All neccessary 'quality of life' items and, in their own different ways, investments in future well-being and comfort. All the rest is bought on a minimum requirement and best value basis.

I just wish it hadn't needed almost seventy years to learn all this

 

[John Fenna]

If I have spare cash - I can afford it.
If it affects my health positively - I can afford it
All else - I cannot afford it!

Never go into debt - I cannot afford it!
Make do with less - I can afford it

 

[Billy-o]

Damn prudence ... credit cards .. spend it. Figure out how to pay for it later.

 

[Janne]

Damn prudence ... credit cards .. spend it. Figure out how to pay for it later.

The North American way?

 

[shaneh]

The North American way?

Our grandparents always saved up for everything.
From a Fridge, Car or a House...

Where as today we live in a society where we have it today, and pay for it tomorrow.

I've seen a lot of friends Killed, or who have Died Early that have never achieved or had there dreams, all because of money. Because do you know what, money does make the world go round, So I can see why people get in debt for today...

In my job I see a lot of death, too much. And not only old age death, I see sad death, people die two days after retirement a couple of weeks before retirement, i hear stories of where they have saved up for years for that once in a lifetime holiday, and they dont live long enough it to actually do it...

I'm lucky, I'm in a job where I can do as little or as much overtime as I want, this month I can do NO O.T and take a basic wage! next month I can more than Double my wages. I know there aren't many jobs where you can do that....

I'm a grafter, a workaholic maybe! but then I'm lucky. Because I LOVE my Job. I dont get up and hate what I'm doing, I would get up and work EVERY DAY if I could. I have been in trouble with my Boss and H.R several times for working too hard. (H.R have had to change Policy and Procedures because of little old me on a couple of times) but that's what loop holes are for.
LOL

If I or We want something enough, I'll work for it...

But then I understand why people get into debt.
We are all alive today...

Enjoy it, because you never know what's gonna happen tomorrow... Live for today.

Why shouldn't we have what we want?
Were an entitled species!

 

[Janne]

Absolutely.
Take a UKP 1000 Tv and turn it into a UKP 1500 Tv by the time you paid off the credit card debt years later, usually well after the first Tv is broken and replaced with a new, better one ( on a credit card, of course...)...


If you pay everything with a good credit card, you can get some useful benefits, like airmiles, travel insurance and such.
But, BUT, it has to be paid fully each month!

 

[Bazzworx]

I always use to say I can't afford whatever until a friend of mine asked why I always say I can't afford something when he knew I could, it got me thinking and in reality I could afford whatever we were talking about but the fact was I couldn't justify it. I have always been a saver, never had a debt apart from a small loan from my mum to buy my first car when I was an apprentice.

The way I work my finances is that I pay everything that needs to be paid at the beginning of the month, I direct debit the same amount each month into my savings account that never gets touched then what ever is left in my current account is for me to spend on what ever I like. The reality is I don't spend that much and every few months I put some extra into savings.

I don't feel I ever go without by managing my money this way but we choose not to have an expensive lifestyle.

 

[Janne]

You can have a rich life without it being expensive.

 

[Jackroadkill]

I work on a farm for the minimum wage, so it's really simple for me - I go by the premise that if if costs X pounds and it would take me Y hours of shovelling muck to pay for it, am I happy with that? If yes, I buy it, if no, then I don't.