We developed the Affordability Index
to help folks decide, based on preset conditions, if they can afford major outlays. It does not replace dependence on God. Rather, it should help you clarify wants from needs so you can focus your prayers. Let Jesus be your final decision maker! We designed the Affordability Index to quantify expected spending decisions based on our PLANE Spending Analysis, that asks the following five questions:
Did I Plan this expenditure and did I include it in my budget?
Will the expenditure increase my Loans?
Are there realistic Alternatives to achieve my spending objective?
Is the expenditure Necessary to achieve my spending objective?
Is this the most Effective use of resources now, relative to my life goals and budget goals?
The Affordability Index has two preconditions. First, you should define precisely the spending objective. Why am I spending? For example, you might wish to change your car; but that's not a good spending objective! The real issue is this: What are my current and medium term transport needs? This is a different question which could produce a different answer. Think about this carefully because poor definitions of spending objectives normally lead to excessive spending based chiefly on clever, seductive advertising!
The second precondition is to ensure the proposed spending conforms to the GAS Principle as outlined on our home page. If it does, answer the PLANE questions based on a proper definition of your spending objective. After that, select a suitable alternative for each item in the Affordability Index interactive form below. Decide to apply the Affordability Index to all spending on individual items greater than $50 or other amount. Husbands and wives should use it together. When you use the Affordability Index, always review Matthew 6:24-31. Recall that Jesus has promised to supply our needs!
For more information on both the Affordability Index and the PLANE Spending Analysis refer to Managing God's Money-The Basics pages 101 to 119. There you will see suggestions to evaluate two exceptions; a car for work, and a special one-off item called a "vase". We would appreciate your comments.
Copyright 2002-2008, Michel A. Bell, (michelbell@managinggodsmoney.com). All Rights Reserved. This site is solely for information. Each person and family's situation is different and needs to be looked at separately and in context. So, before you implement any financial decisions, ensure you consult an independent financial advisor
