Affordability Index Calculator
Financial Tools
/ Affordability Index Spending Decision Process
What am I buying? What's my objective?
Why am I buying this?
(Don't assume you need an item being replaced. Re-justify it. Define the need generically: you don't need a car, you need transport, which the public system could supply.)
"PLANE" Questions
Score
Comments
P
lan
In the Budget
Not Budgeted
This is a
spending decision process.
Decide if the amount is in your budget or can be accommodated therein without overspending the total budget. If it's in, select "0." Otherwise, it's "Not Budgeted".
L
oans
Unchanged
Increase
If you will pay by credit card, select "Unchanged" only if you
resereved funds
to pay the full credit card balance when it is due.
A
lternatives
None
Yes
Is there an alternative to do the
same objective?
Not an alternative objective, but an alternative to achieve the same objective. The
Affordability Index
assumes you identified the need to do the objective already. This question helps to decide if you can afford to carry out this need.
N
ecessary
Yes
No
Is this item you plan to buy
Necessary
for the stated objective. If you aim to "provide transport" is it necessary to buy a top of the line Mercedes, versus a more economical car? However, beware, you do not swing the other way and buy a car that will need continuing maintemance.
E
ffective
Yes
No
Is this the most effective use of resources now?
Seek to know God's will for you in this decision.
Even if you scored "0" for each item above consider this:
If you used these funds now, would it prevent you from doing a different objective later?
Total Score
Scoring System:
If the total of the five selected items is less than 6, you
can afford
this item.
If the total of the five selected items is "6" or greater, you
cannot afford
this. But, this is merely an initial guide, go to God and let Him guide you.
Affordability Index
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