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Affordability: When did Affordable Become What is the Monthly Payment
Over the past few weeks, we've been looking at affordability from a few different angles:
Facts, Influences & Choices - separating what's true, what influences our situation and where we still have choices
Lifestyle Creep - how conveniences, expectations and even luxuries can quietly become our new "normal"
The Whole Affordability Equation - recognizing that affordability isn't caused by just one thing. Housing, interest rates and inflation matter, but so do income, debt, lifestyle, family responsibilities and the choices we make along the way.
This week, I want to look at something we do have more control over - how we decide what we can afford.
How do we decide what we can actually afford?
Somewhere along the way, the conversation around affordability changed.
Instead of asking:
"How much does this cost?"
we often ask:
"How much is the monthly payment?"
Think about how many things we can now turn into a monthly payment:
🚗 Cars - loans used to commonly be 3-5 years. Now 6-7 year loans have become much more normal.
📱 Phones - some cellular companies don't even give you the option to pay for the phone upfront. (Ugh.)
🛋️ Furniture - "just $___ a month" or so many months interest-free makes it easier to buy now and worry about paying for it later.
🛍️ Buy Now, Pay Later - even smaller purchases can be divided into payments.
📺 Subscriptions - more and more of our spending has become an ongoing monthly expense.
One payment may not seem like much.
But add enough of them together and suddenly a large portion of our income is already spoken for before the month even begins.
The payment isn't the price
A lower monthly payment can make something feel more affordable.
But stretching out the payment doesn't lower the price. It also means you're committing future income to something you bought today.
Stretching payments out can mean:
Paying more in interest
Staying in debt longer
Spending more than we otherwise would
Counting on future income that may or may not be there
Taking choices away from your future self
That fourth one is important.
I've seen how quickly life can change:
A job loss you never expected
An accident that leaves you unable to work
A medical issue that changes your income or expenses
None of us plans for those things to happen.
Yet when we finance something for the next 5, 6 or 7 years, we're assuming our future income will be there to make the payments.
Every payment we commit to today is money our future self no longer gets to decide what to do with.
The fewer payments we carry with us, the more flexibility we have when life doesn't go according to plan.
What have we started believing is "normal"?
I've talked with plenty of people who assume they'll always have a car payment.
It's simply become part of life.
But what happens when we challenge that belief?
Instead of:
"I'll always have a car payment."
What if it becomes:
"How could I get to the point where I don't need one?"
That doesn't happen overnight.
It might mean:
Keeping a car longer
Buying less car
Saving ahead for the next one
Continuing to make that "car payment" to yourself after the loan is gone
When we believe something isn't possible, we usually stop looking for ways to make it possible.
Awareness creates options
Before deciding whether something is affordable, try looking beyond the monthly payment:
What's the total cost?
How long will I be paying for it?
How much more will financing cost me?
What am I giving up in the future to have this today?
Does this purchase fit my priorities - or does the payment simply fit my budget?
Because affordability isn't just about what we can pay for today.
It's also about how much freedom we're leaving ourselves for tomorrow.
Something to think about
Take a look at the payments you're making today and ask yourself:
What am I paying for today with tomorrow's income?
Then take it one step further:
Is this payment helping me move forward - or limiting my future choices?
Have I accepted a payment as "normal" simply because that's what I've always done?
What would become possible if I didn't have that payment?
One small action
Pick one payment you're currently making.
Don't worry about changing anything today. Just look at:
How much you still owe
How many payments you have left
How much of your future income is already committed
Awareness creates options.
Sometimes seeing the whole picture is the first step toward deciding you want a different one.
Now I'd love to hear from YOU
I've shared my perspective throughout this affordability series. Now I'd love to hear yours.
I've put together 5 quick questions about:
What's affecting affordability for you
What you feel you have control over
Money Mindset Workshop topics
What you'd like me to write about next
It should take less than 2 minutes, and your answers will help shape some of our future conversations.
Thanks for being part of the conversation.
Cheering you on
Liz
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