What Can I Really Afford?

There is a very interesting tool on ManagingGodsMoney.com (no affiliation with GrowGodsMoney.org) in the section about Affordability.  They start with a very good discussion and guidelines around the affordability of a home and then lead into a tool they call the Affordability Calculator. I encourage you to take some time and check it out. You can also browse their other tools.

We have included below an excerpt from their site with just enough of their good material to get you interested… click their link to connect for more detail!

— Check out ManagingGodsMoney.com for more —

To access the Affordability Index Calculator immediately, click here.


Affordable is Subjective

Affordable means different things to different people. Affordable, according to Merriam Webster Dictionary, means being within the financial means of most people. However, the dictionary doesn’t define financial means. I define affordable as spending funds without acquiring or committing to acquiring debt. With debt easily available nowadays, it’s essential we keep this affordable definition in mind. Unless we have a firm grip on affordable, we cannot be effective as God’s stewards.

Affordable Housing

Affordable housing should be viewed separately from affordability of other buys. Your house is likely to be your most expensive lifetime buy, and it’s unlikely you could buy it without debt. Housing affordability became widespread in the 1980s in Europe and North America. Today, it is a major issue. Here is my simple checklist to decide affordable housing. Ensure each of these criteria exists before you conclude you can afford to buy a home. Don’t let government enticements by lowering deposit requirements, cutting interest rates, and so on, sway your decision.

  1. You are debt free.
  2. Working with a monthly budget.
  3. Know your housing needs such as size of housing. For example, will the family size increase shortly?
  4. Have at least 20% down payment for a conventional mortgage and so avoid mortgage insurance (in Canada).
  5. Understand and accept sacrifices needed to pay the full yearly housing costs. What might you have to give up to pay these costs regularly?
  6. Understand current and projected state of the economy and housing market, and feel reasonably comfortable you will be able to fund your total housing expenses for six months, even if you were laid off. This article on speeding up mortgage payments might help you.
  7. Understand the best approach for mortgage life insurance.
  8. For a couple, husband and wife are on the same page.

Affordable housing, therefore, means the ability to buy the house so that the total estimated ongoing costs, including a mortgage, do not compromise current and projected household budgets, plans, and commitments. Essentially, affordable housing means carry a mortgage, but no other debt.

— I am grateful for good sites like ManagingGodsMoney.com —


Remember that all you have belongs to God. Manage your money God’s way. Visit GrowGodsMoney.org .