In our society, we have long been encouraged to get as much as we can afford. Whether it’s buying a car that comes with the maximum monthly payment that we can “afford,” to buying the biggest possible house, sometimes it’s better to buy less than you can afford. This was once again brought to my attention by a post on Out Of Your Rut about buying less house than you can afford.┬áIt served as a valuable reminder that just because you can “afford” something doesn’t meant that you should buy it.

Will You Always Be Able to Afford It?

One of the biggest issues is the fact that just because you can afford it now doesn’t mean that you will be able to afford it later. If you push your finances to the max right now, it makes you more vulnerable to unexpected changes in your situation. One of the best examples, of course, is what happened just before the mortgage market crash. Many people got bigger homes because they could “afford” them with the financing options available at the time. A few years later, suddenly they couldn’t afford those homes when the mortgages reset.

The same is true of cars, and even of some of the big ticket items you might purchase. It might seem like a good idea now, but what happens if you lose your job? What if something catastrophic happens? An accident or a natural disaster can really change your financial fortune. If you are already stretched to your limit by “affordable” purchases, you don’t have a lot of wiggle room for unpleasant financial surprises.

Does Your Purchase Match Your Priorities?

Sometimes, an “affordable” purchase may not stretch your financial limits, but it doesn’t mean that it’s always the best use of your money. Consider your values. Does your spending match your priorities? Most of us are more satisfied with our lives when we are taking care of what’s important to us. This means that it can help to make sure that your spending is in line with your values and priorities. Think about your financial and life goals, and consider whether your expenditures are helping you reach them. You might be surprised at how much better you feel about your life and your finances when your money has a purpose, and you are preparing for what’s next.

While some people enjoy things, and the status that comes with them, many of us don’t derive increased enjoyment from the accumulation of items that have little real value to us. Before you spend money on something, even if it is well within your ability to pay for it, consider whether or not it will truly enhance your enjoyment of life — and whether you are moving closer to the most important goals in your life. A solid financial plan, and value-based spending, are great tools for helping you retain your focus.

Bottom Line

“Affordability” shouldn’t be the only thing you consider when making a purchase. Carefully consider whether or not your life will be truly enhanced by your latest money decision, and also consider whether or not the item will remain affordable. Just because you have the money now doesn’t mean that you should just spend it.



Miranda is freelance journalist. She specializes in topics related to money, especially personal finance, small business, and investing. You can read more of my writing at Planting Money Seeds.