Affordable Monthly Payments: An Oxymoron and Danger to Your Budget

By Jackie Beck   Updated 05/19/2021 at 5:19 pm

If you’re thinking of buying a new car or doing some home improvements (or any number of other things), the normal thing to do is sit down and look at your budget to see whether or not you can afford it.

And while budgeting is awesome — and a critical part of getting into good financial shape — your budget is not the place to look to see whether or not you can afford to buy something.

Why? Because if you’re looking there, you’re looking to see whether or not you can afford the monthly payments, not whether or not you have the money to buy the item. And affordable monthly payments are an oxymoron.

The place to look to see whether or not you can afford something is your bank account.

Ignore the ads

Yes, I know, you see ads with offers like these all over the place:

Ad examples

And those affordable monthly payments make it seem like such a good idea. Just $179 a month for a BRAND NEW CAR! Woohoo! What a deal!

But angels do not sing because you go into debt.

In reality, those offers are just ways for companies to move more product faster and easier, by selling to people who may not actually be able to afford them. It’s not a way to help you out.

Why affordable monthly payments are an oxymoron

An oxymoron like “controlled chaos” is laughably obvious. After all, how can chaos be controlled? The phrase affordable monthly payments is no different, although it may not be as obvious due to cultural norms.

In other words, it’s become normal to equate “affordability” with “having enough money to pay just the bare minimum right now” if everything always goes perfectly. In reality though, being able to afford something really means being able to buy something that’s within your financial means.

By definition, if you have to borrow money in order to buy something, you cannot afford it. You might be able to afford something else instead though.


For example, if you don’t have $30K sitting in your bank account right now set aside for a brand new car but you really need a car, maybe you can come up with $3K for a used one while you save up for a slightly better one. You can then rinse and repeat until you get the car you actually want.

You may look at that huge price tag and decide that there’s no way you could ever save up that much money, but the thing is, when you aren’t spending all your money on debt (and the associated interest) each month, it will pile up fast.

What most people don’t realize is that all those monthly payments are actually preventing you from being able to afford the things you really want. Imagine getting your paycheck, and not having to send any of it off to creditors. You’ll have a lot more money available to buy the things you want to buy — and you’ll spend less for them, too.

So the next time you’re trying to decide whether or not you can afford something, find out the total price and then check your bank account instead.

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8 thoughts on “Affordable Monthly Payments: An Oxymoron and Danger to Your Budget

  1. Although I have no debt except for a small mortgage, I do not have a problem with financing with a few caveats! First, limit the amount, get the lowest interest rate and pay it off quickly.

  2. One of the few times we are happy to take on more debt is when we replace an appliance and take advantage of Best Buy’s 12 month no interest financing. My next car will be used for the reasons you mentioned.

    1. I’m not a fan of the no interest deals either. I figure why take on the risk of owing 30%+ interest on the whole amount if something goes wrong?

  3. I think it’s good practice to run as fast as you can from any salesperson-type who starts a relationship asking something like, “So, how much payment can you afford?” With this approach to all of one’s larger purchases, you can be sure financing costs will eat up every bit of what should be going into savings.

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