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I mentioned to a friend the other day that I got a really cute sweater at a thrift store.  Her response was “why, you can afford to shop elsewhere.  And you are taking clothes away from someone who might not be able to.” I had to think a little bit about her second point- was I really taking away the opportunity to buy that sweater from someone who really needed it?  However, the Goodwill Store isn’t a charity in the sense that they give away clothes or provide clothes to the needy… so its not as if I’m going to a food bank and taking food out of the mouths of the needy or anything like that. Goodwill is open to everyone, with no income requirements or requirement of impoverishment.  In fact, I think that when I buy a sweater at Goodwill, they put that money towards helping people (right?)  So I was able to answer that issue relatively easily.  Even more thought went into the idea of whether I could, in fact, afford to shop elsewhere.

Technically, the answer is yes.  I do have enough money left over in my paycheck after all of my minimum required payments are made.  Between me and fiance, after our minimum payments and grocery costs, etc. we have about $1500 a month left over (and as my income increases we should have more).  So, I could certainly afford to take some of that $1500 and go to the Gap or Old Navy, or heck even Banana Republic (and maybe even Gucci or Prada if I wanted to get really crazy!).  However, this is only if I decide to pay the minimums.  And, if I do decide to pay the minimums, I will be paying student loan payments for the next ten years.  And I don’t know how long Fiance would be paying off his credit card debt… probably some ridiculous period like 20 years.  And over that period, we would have paid as much in interest as the loan was originally worth, if not more.  

So, how do I determine whether I can “afford” something?  The question of affordability really comes down to how much “extra” money I have, so it is dependent on what I consider to be “extra”.  If anything above and beyond my minimum payments is “extra” then I have a lot of “extra”.  But, if “extra” means money that I have that has no other place it should go, then it means something very different.  Logic and common sense would tell me that I can’t afford anything and that I have NO extra money, as long as I am in debt, because my networth is negative and so money coming in should just reduce the amount that I am in the negative.  But, this of course isn’t reasonable either.  I can’t throw every single cent at debt and have no money left over for anything else because eventually I would burn out (sooner, rather than later) and because some purchases are almost-needs, or at least a step above wants.  

So, my definition of “affordable” is if the item provides the best value for something that I need or something that I need/want, considering overall value.  Need/want is items that fall on the border… like clothing. It is a need but also a want.  Value is a component that compares price with quality- that factors in the idea that sometimes the lowest priced available item has other costs that make it more expensive (like costs to my health or costs that would occur because the item would need to constantly be replaced).  

For example, I’m not going to shop at The Dollar Store for all my clothing purchases, because I don’t think the quality would be good.  I’m also not going to eat Ramen noodles because my health would suffer.  I can “afford” better than that, i.e. I am willing to allocate a portion of my money that I could be using to get out of debt, to purchase something slightly better than my minimum need.  However, I can’t afford to allocate a larger percentage of my money then necessary to get something, unless the quality is incrementally great enough to make up for the extra length of time it will take to get out of debt.  

The quality of a shirt from a retail sale isn’t incrementally better than the quality of a shirt from a thrift store.  I spent $4 at the thrift store for a name brand designer sweater.  $4 at any other store would not buy me something of equivalent quality.  I would have to spend much more money to get something of equivalent value from someplace else.  I can’t “afford” to allocate money to this because my money has other priorities.

Maybe when I’m out of debt, my definition of affordable will change.  However, since I will have other goals- like paying off a house and saving for retirement- I doubt that it will change that much.  I will probably still say I can only “afford” to spend as much as necessary to get something of value and good quality.  I will probably still calculate whether the additional cost of an item is worth the cost to other goals, in determining whether I can afford something.  And, I personally don’t think thats a bad thing.  

So, my answer is “no, I can’t afford to shop elsewhere” in my definition of affordable.