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    Can I Afford it?

    I thought it would be interesting to have our own Can I Afford It? on savingadvice.com

    So, if there's something you want to buy, and wonder if you should or not -- post what it is, it's cost, importance to you and show us the money!!

    Other viewers, please critique each person respectfully.

    Just to start things off, I will go first.. I already know I'm denied but I just wanna jump things off...

    I would like to buy:

    a new Laptop for at least $1,200 - I don't have one and I'm pretty sure my desktop is going to die on me any day now!!

    Here's the money:

    Age: 24
    Monthly income: $3,000 take home
    Rent: $1,000
    Car payment $360, - $15,000 bal. @ 11.99 percent
    CC's: $5,500 @ 3.99 percent
    Roth IRA: $1,275
    401k: $8,600
    Savings: $7,880

    How would I be paying for it?

    I would save up for it! But I really need to put all that money towards CC debt. I know
    Last edited by swaymonae; 04-13-2009, 01:26 PM.

    #2
    I agree, that would be a fun set of threads--maybe it could be added as a separate section within the Personal Finance forum.

    However, a couple more things you haven't told us that normally is needed.... Age, and monthly income. Without age, income, debts, savings, and retirement savings, it's hard to give a definite answer.
    "Praestantia per minutus" ... "Acta non verba"

    Comment


      #3
      Added!

      Comment


        #4
        No, you can't afford it. Here's why. You are over $20k in debt. I am guessing you make around $45K a year gross? So this debt represents a significant percentage of your income, most of it at 12% interest. It concerns me that you have so much CC debt at your age as well. If you absolutely "need" a computer, you can get a nice laptop for much much less than $1200. Just because you "save up" for it doesn't mean you can afford it.

        Comment


          #5
          Agreed,..
          Thanks

          Comment


            #6
            I like this idea. I'll play.

            I would like to buy:

            A motorcycle - $3,000

            Here's the money:

            Age: 25, married
            Monthly income: $5,800 take home

            Debt:
            Mortgage: $1,300 - $160k left @ 5.875% fixed
            Student Loans: $225 - $30k left @ 2.25% fixed

            Assets:
            Roth IRAs: $15,000
            401k: $10,000
            Savings: $25,000

            How would I be paying for it?

            Save $300 per month until next spring

            Comment


              #7
              Originally posted by project15 View Post
              Save $300 per month until next spring
              hahaha the people on our forum here make it far too easy. Can you afford it with your plan to save for it? Definitely. Could you afford to buy it right now? I'd probably say 'yea sure'.
              "Praestantia per minutus" ... "Acta non verba"

              Comment


                #8
                Originally posted by project15 View Post
                I would like to buy:

                A motorcycle - $3,000
                I think there is one flaw in Suze Orman's system for evaluating affordability. She looks at what the caller has in savings but never mentions how much they are actively contributing to savings. She may ask about that off the air but doesn't mention it on air.

                I'd want to know what % of gross you are contributing to your retirement plans. If you are contributing at least 10% and preferably 15%, I'd say you can certainly afford it. Sure, you could prepay your student loans, but at such a low interest rate, why bother. Save up, pay cash for the bike and have fun. Make sure you've got your helmet on, though.
                Steve

                * Despite the high cost of living, it remains very popular.
                * Why should I pay for my daughter's education when she already knows everything?
                * There are no shortcuts to anywhere worth going.

                Comment


                  #9
                  Want to buy: Upgrades for mountain bike - $500

                  Income: $2900 mo take home (after HSA, 401k, EF direct deposit)
                  Status: 26, Single, Rent, 15% gross to retirement
                  Debt: $0
                  Savings: EF - $9k, Money Market - $3k, Roth/401k - $19k

                  Pay using: Probably just absorb it into the monthly budget under discretionary spending and "healthy living" categories for a 2 months.

                  Comment


                    #10
                    Originally posted by project15 View Post
                    I like this idea. I'll play.

                    I would like to buy:

                    A motorcycle - $3,000

                    Here's the money:

                    Age: 25, married
                    Monthly income: $5,800 take home

                    Debt:
                    Mortgage: $1,300 - $160k left @ 5.875% fixed
                    Student Loans: $225 - $30k left @ 2.25% fixed

                    Assets:
                    Roth IRAs: $15,000
                    401k: $10,000
                    Savings: $25,000

                    How would I be paying for it?

                    Save $300 per month until next spring

                    No CC debt? Is $25,000 8 months worth of EF? PS: Congrats on having this much saved at 25

                    Would saving $300 per month take away from savings contributions? How much would you still be contributing to savings monthly as your were saving $300 per month?

                    What is your outgoing total per month?

                    Comment


                      #11
                      Originally posted by red92s View Post
                      Want to buy: Upgrades for mountain bike - $500

                      Income: $2900 mo take home (after HSA, 401k, EF direct deposit)
                      Status: 26, Single, Rent, 15% gross to retirement
                      Debt: $0
                      Savings: EF - $9k, Money Market - $3k, Roth/401k - $19k

                      Pay using: Probably just absorb it into the monthly budget under discretionary spending and "healthy living" categories for a 2 months.
                      You're in a good place financially.. she may deny you just based on your EF - but I say go for it.. Although if you can't live on $1,100 a month for 8 months you should build your EF first and when dividing it by 8 = surviving.. you're good to go!

                      Comment


                        #12
                        Originally posted by swaymonae View Post
                        No CC debt? Is $25,000 8 months worth of EF? PS: Congrats on having this much saved at 25

                        Would saving $300 per month take away from savings contributions? How much would you still be contributing to savings monthly as your were saving $300 per month?

                        What is your outgoing total per month?
                        No CC debt. All cars are paid off. For retirement, we contribute $922 per month which is roughly 11% of our gross income. The $300 per month would be taken out of the current "future car" fund that is currently getting $1200 per month - this just happens to be all of our extra money not allocated to anything else. We won't need a car for another 5-7 years as ours are relatively new (2003 and 2005) and in good condition.

                        Comment


                          #13
                          I believe you are approved

                          Comment


                            #14
                            Originally posted by project15 View Post
                            I like this idea. I'll play.

                            I would like to buy:

                            A motorcycle - $3,000

                            Here's the money:

                            Age: 25, married
                            Monthly income: $5,800 take home

                            Debt:
                            Mortgage: $1,300 - $160k left @ 5.875% fixed
                            Student Loans: $225 - $30k left @ 2.25% fixed

                            Assets:
                            Roth IRAs: $15,000
                            401k: $10,000
                            Savings: $25,000

                            How would I be paying for it?

                            Save $300 per month until next spring

                            YOU ARE DENIED!

                            Pay off your student loan first. Until then you are DENIED.
                            Got debt?
                            www.mo-moneyman.com

                            Comment


                              #15
                              Originally posted by swaymonae View Post
                              I thought it would be interesting to have our own Can I Afford It? on savingadvice.com

                              So, if there's something you want to buy, and wonder if you should or not -- post what it is, it's cost, importance to you and show us the money!!

                              Other viewers, please critique each person respectfully.

                              Just to start things off, I will go first.. I already know I'm denied but I just wanna jump things off...

                              I would like to buy:

                              a new Laptop for at least $1,200 - I don't have one and I'm pretty sure my desktop is going to die on me any day now!!

                              Here's the money:

                              Age: 24
                              Monthly income: $3,000 take home
                              Rent: $1,000
                              Car payment $360, - $15,000 bal. @ 11.99 percent
                              CC's: $5,500 @ 3.99 percent
                              Roth IRA: $1,275
                              401k: $8,600
                              Savings: $7,880

                              How would I be paying for it?

                              I would save up for it! But I really need to put all that money towards CC debt. I know

                              YOU ARE DENIED! You CAN'T AFFORD IT!

                              You still have Car payment, Credit card, small little retirement balance and savings. Use your computer until it dies. In the meantime, you are DENIED.

                              I really like being SUZE!!!!!
                              Got debt?
                              www.mo-moneyman.com

                              Comment

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