can i afford this?

“Can I afford this?” How do you answer that question? If you’re like many people, you immediately think about your checking account, and whether what’s in it will last until your next paycheck if you purchase whatever it is you’re looking at. Alternately, you think about whether the monthly payments will push your “expenses” line over your “income” line. And that’s not bad — in fact, it’s miles better than the alternative many people followed before 2008, to whit: not asking the question at all. But as is so often the case on this little corner of the Internet, I challenge you with the idea that this is not the right question to ask.

This is no newsflash, of course. You can afford a lot of things! If your child (or your inner child!) asks you for a toy or candy, you can’t honestly say that you can’t afford it, can you? A buck or ten is hardly going to break the bank! But at the same time, you need some measure of determining whether or not spending the money fits in with your finances and your values.

Also, just looking at your checking account isn’t necessarily going to give you a clear picture. Yes, there’s some money in there, but how much of it is earmarked for groceries? Rent? Some portion of the auto insurance you’ll owe in October, or (ouch) the property taxes you’ll owe in December? If your financial situation is anything but the simplest, single-person steady-income scenario, you’re not always going to know the answer. And overdraft fees are a painful way to learn you were wrong.

Monthly payment plans — even at 0% interest! — can be even worse. If you sign up for a monthly payment that will go on for four years, only to find that your situation isn’t quite what you guessed it was or that you didn’t really want whatever it is you got, you’re stuck. And heaven forbid you actually want to make a change down the line — say, start saving for a vacation, or take a lower-paying but more-fulfilling job. Nope — you gotta pay that debt first.

No, “can I afford this?” doesn’t really work. A better question, as you’ve probably guessed, is this: “does it fit in my budget?” Suddenly, answers start becoming much clearer. If you have a budget for toys (or simply “entertainment” or “recreation”), then you can easily and simply answer the question “yes” or “no”. No guilt, no fuss, no muss; if you budgeted for it, why not buy it? You’ve already decided how much you value toys; by all means, follow through with that decision! And because each dollar in your budget has one and only one job, you know that spending money from your toy budget won’t affect your ability to pay your insurance or property taxes. A budget will also tell you how much of your spending is discretionary, which in turn will tell you if a given monthly payment will cause you to give up more flexibility than you’d care to.

The key, once again, lies in asking the right question. Picasso wasn’t just messing around when he said, “Computers are useless — they can only give you answers!” How about you? When it comes to making a purchase, what question do you ask yourself, and how do you answer it?