What You Can Really Afford


There is a misconception about what we think we can afford. This is especially true in the United States where access to credit cards is made relatively easy. If you’re in a situation where you’re having trouble managing your money, then this article is for you. We’ll list some misconceptions we tend to have about money and wealth.

If the money is not in your bank account…

…then you can’t afford it.

If you have to produce some kind of debt to acquire an item or service, you can’t afford it. This is the most common misconception we have. Since credit cards are so accessible, it is easy to mistake going into debt with having the money on the account. 

Essentially, debt is money you are borrowing. So, by definition, if you have to use credit to purchase something it means the object doesn’t really belong to you.

If you purchase on credit…

…then you’re paying more.

When you buy something with credit, you’re paying significantly more than its original price. Indeed, you must take into account the interests and the inflation rate. Throughout the years, inflation is rising. Meaning, the price of money today is more expensive than it used to be 10 or 20 years ago.

Depending on how long it will take you to pay your debt, you may have to cover larger amounts. And although you may not realize it, it will significantly impact your daily life.

Having the exact amount in your bank account…

…doesn’t mean you can afford it.

This is another common misconception. It’s not because your bank account shows you have $1k that you can spend this amount on a new phone. In fact, you should deduct monthly payments, and other amounts necessary for daily expenses.

Of course, if you already calculated your budget and $1k is the remaining amount, then you can spend them freely. Although, some people would argue that you can’t afford an item if you don’t have at least twice its value in your account.

Building healthier spending habits

Spending money is necessary and often difficult to manage and keep track of. At Finnt, we encountered spending issues personally (for ourselves and our families). This is why we decided to build a banking app to help you with saving and spending, alone or as a group.

Finnt has a multi-account feature where you can track your family expenses. Each expenses will fall into a category to help you make the right budget cuts. Furthermore, to encourage saving money instead of spending it, the account displays a 4% yearly interest*. That way, you are sure the money you don’t spend is secure and working for you! 

In our next article, we’ll cover the hot topic of debt and see the best ways to avoid it. In the meantime, join us on the Finnt App to start building healthier spending habits!

*current APY at the time of publishing