Money

Can You Afford It?

12.05.11 scale

These days a seemingly unending slew of financial experts are telling us to reduce unnecessary expenses.  But when some of those cutbacks impinge upon our desires, many of us are reluctant to give them up.  We encourage you to ask yourself this sobering question: can I afford my lifestyle?  Cotton Candy contributor and author of Moneylicious: A Financial Clue for Generation Y Ornella Grosz spells out seven ways to learn if you can afford your way of life.  The answer may surprise you.

You know you can afford dining out when you don’t have to worry about leaving a tip.  Do you have to think about leaving a 15 percent tip versus a 20 percent tip? It’s amazing how many of us will calculate to the exact penny the amount of the tip should be.  When you have properly allocated money for your dining out experience, you can feel confident that you can afford it.

You know you can afford helping family members when giving doesn’t mean depleting your resources. If you find yourself in the situation that your resources are dwindling away, it’s time to reevaluate if there are other ways you can help family members without sacrificing your financial affairs.  Before rushing into helping others, first take time assess that you are in the financial position to help.  Otherwise, it could lead to a disastrous financial outcome for you.

You know you can afford to buy holiday gifts when you don’t have to charge them on a credit card.  Consider a second job or turn your hobby into cash as a way to pay for holiday gifts.  Working for the money to pay for gifts far outweighs the alternative of a credit card.  Avoid the New Year’s resolution to be paying off holiday gifts.

You know you can afford to buy a home when you can afford more than the mortgage payment.  As obvious as it may seem, new homebuyers are not always prepared to handle the utilities, property taxes, and the upkeep of the home.   And if you enjoy a transient lifestyle, then you should hold off on purchasing a home.

You know you can afford to buy a 60 inch HDTV when you have no credit card debt and at least one month of monthly expenses saved.  Although, saving three to eight months of monthly expenses is preferred, at times you are allowed to splurge.

You know you can afford to go on vacation when you have completed a reality check.  Taking a vacation to wine down and relax is as important as paying your bills on time. However, if a weeklong vacation is a stretch, maybe you will need to settle for a three day weekend trip.  There’s no shame in relaxing and enjoying a couple of cocktails with your girlfriends.

You know you can afford a shopping spree when you have set up a separate spending account for it. When allocating money towards your shopping spree account make sure you continue to save toward your emergency and retirement account.  The beauty of a shopping spree account is you are prepared to enjoy the experience without feeling guilty.

Cotton Candy Magazine®