Comments on: The Tough Money Love “Can I Afford it?” Quiz

By: Mr. ToughMoneyLove

Mr. ToughMoneyLove — Tue, 06 Jan 2009 06:15:17 +0000

Kitty: I guess my point is that if you are in doubt already, if you answer yes to one of these questions, you should resolve the doubt against spending the money.

MasterPo: If you received TARP funds, could you pay it back?

G Jules: Agreed to your no. 12

Andrea: Thanks.

Beef: Thanks for the kind words.

Tom: Credit to you for starting this list!

By: TStrump

TStrump — Tue, 06 Jan 2009 05:33:19 +0000

Great follow up to my original post!
Cheers!
Tom

By: Beef Up Your Piggy

Beef Up Your Piggy — Mon, 22 Dec 2008 20:53:13 +0000

This is hilarious. Love your Top Ten on this!!!

By: Andrea

Andrea — Mon, 22 Dec 2008 15:33:45 +0000

I tagged on over at my site.

By: G. Jules

G. Jules — Mon, 22 Dec 2008 13:20:03 +0000

12. If buying it means cashing out your emergency fund… and it isn’t an emergency… you can’t afford it.

(I pass all ten of those, and I could theoretically take the money in my emergency fund and go to Paris. But it’d be a stupid decision.)

By: MasterPo

MasterPo — Mon, 22 Dec 2008 05:08:20 +0000

What if *I* need TARP money?! (LOL!)

By: kitty

kitty — Mon, 22 Dec 2008 00:55:01 +0000

Good. A couple of comments:
9. “If you are a pension-less baby boomer living in fear of your 401(k) statement, you can’t afford it.”
I don’t agree with this one. There are a lot of baby boomers who are afraid to look at their 401K this year not because they don’t have enough money but because they have considerably less money than they used to and they are scared to find out how much less. The more money you have in 401K the larger the losses. Even with recommended 100-age allocation.

10. Well… I certainly would like Santa to bring me a few million dollars so I could buy an apartment on Central Park West. At the very least how about 150K I lost? Does it mean I couldn’t afford a transatlantic cruise I just came back from even if I cash-flowed the complete thing? Wow, I am heartbroken.

Seriously, passing the quiz doesn’t mean one can afford something. In general having cash to buy an item doesn’t mean one can afford it. Having the money is necessary, but what you plan to buy vs how much time it takes you to save for it is important as well. In some cases just a mere fact that you need to save money to buy something means you can’t afford it. E.g. I can easily afford to spend $3000 or more for a vacation; I cannot afford to spend $1000 for a single meal. An extreme example would be one guy who called Suze Orman once asking to spend most of his savings on a Ferrari. He had cash, but he still couldn’t afford it.