How to know if you can afford something before you buy it

You can afford it if, after you subtract the price from your safe-to-spend money, the amount left per week until payday is still more than a normal week costs you. Start with your balance minus the bills due before payday, subtract the price, divide by the weeks left, and compare. It takes about thirty seconds.

This is for everyday purchases, in US dollars, from a pair of shoes to a repair. A car or a house needs a lender's calculator and a longer look. It can't see spending you haven't entered, and it isn't financial advice.

An example: $600 safe to spend, four weeks to payday

Say you have $1,850 available. Bills due before payday come to $900 and you're holding back $350 you don't want to touch, so your safe-to-spend figure is $600. Payday is four weeks away. A normal week of groceries, fuel and small things costs you about $110. These figures are an illustration, so swap in your own.

The $42 purchase barely moves anything. The $180 one leaves $105 a week, which is under your normal $110, so you'd feel it by week three. The $480 one leaves $30 a week, and that's a no for today. It might be a yes after payday, or with a plan to save for it.

The check, in five steps

1. Work out your safe-to-spend money: the available balance, minus every bill and payment due before your next payday, minus anything you're holding back. The full method is here, and if your banking app's balance looks higher than what you really have, this explains why.
2. Subtract the full price, including tax and shipping.
3. Divide what's left by the weeks until payday. Count the days and divide by seven, rounding to the nearest half week.
4. Compare that weekly figure with a normal week for you. Add up groceries, fuel and small purchases from the last two or three statements. If the leftover is lower, you can't afford it today.
5. Look for an annual or quarterly bill that lands before payday and isn't in your sum yet, such as insurance or a renewal. Sinking funds are how you stop those from breaking the check.

If it's close, wait for payday

We'd wait when the answer is close and the purchase isn't urgent. Waiting until after payday costs nothing, and the number gets bigger without you doing anything. If it can't wait, like a repair, then the question changes to what you can move. How to find $200 this month lists specific ways to free up cash.

Splitting the payment doesn't shrink the price

A buy now, pay later plan splits the cost. The CFPB describes one common version as four interest-free payments two weeks apart, with the first sometimes due at checkout. Say a $180 item comes as $45 today and $45 at two, four and six weeks. Today's number falls by $45, and each of the next three paydays is $45 lower.

Test the full price against the whole schedule, not the first payment. Then add each installment to your bills list on its date. The CFPB notes that most of these plans charge late fees for a missed payment, and that a bank may charge an overdraft fee if an automatic payment fails.

When the number misleads

• Your safe-to-spend figure is old. A number from three weeks ago is a guess. Redo the sum before a big purchase.
• You forgot a bill. Annual charges are the usual culprit, and a bills list that includes them fixes it.
• Your pay isn't steady. Use your lowest recent month, not the last good one. Budgeting with irregular income shows how.
• The item has a cost after you buy it, such as a subscription, accessories or upkeep. Add those before you divide.
• You're paying with a credit card. The card doesn't change the answer. It moves the cost to a payment you'll owe later, so count that payment as a bill on its date.

Questions people ask

Where the Companions fit

Monthly Money Reset is free and shows this arithmetic. You type in the money you have now, your income and your bills, and it shows one safe-to-spend figure with every line of the sum. Its Quick add screen previews what a spend would change before you record it, such as from $600.00 to $558.00 after a $42.00 spend. It also shows an About $X a week figure, which is safe to spend divided by the weeks left in the month, not to your payday, so treat that as arithmetic. It only knows what you type in, and it doesn't connect to your bank.

Personal Finance Companion has no weekly figure. Its Available Money is a month-level estimate across accounts, bills, subscriptions and debts, with the working shown, so use the steps above for a purchase decision today.