Of all the financial uncertainty I’ve seen, this is the question I probably get the most.

Whether “this” is a spring break trip with friends, a nice pair of headphones, or something else, students are often uncertain about the large purchases they make.

Do I have enough money for this? Should I be saving more? Am I being irresponsible?

These questions replace what could be an exciting buy into an anxiety inducing decision. And it shouldn’t have to be.

You (in theory) know what’s going on with your money. How much you’re going to make next week, about how much you’ll spend, and how much you have in savings.

But the answer to the “can I afford this” question has never been directly answered for a lot of us. And it may vary from person to person.

If you could answer this question, you’d have less purchase anxiety or buyers remorse, and more confidence in your finances. That’s why we’re gonna…

Since you want an epic ayahuasca sabbatical so bad, you want to make sure you’re life altering hallucinogenic escapade is a financially savvy decision (right?). So here’s how to actually evaluate the expense.

Take your monthly income and subtract everything you have to pay. Whether that is rent, utilities, subscriptions, loans, groceries, waxing membership, etc.

What's left is your breathing room. This is the amount you have left after your known financial obligations.

A rough guide:

These percentages may vary from person to person, but they help with a simple estimate of how large a purchase is for you.

Ideally, you should have at least one month of expenses saved at all times. If this purchase would drop you below that, the answer is maybe wait a bit.

Buyers remorse/purchase anxiety is easily avoidable if you are confident you will be financially secure afterwards.

This is not a requirement, but helps to evaluate the purchase.

Divide the price by your hourly wage (or what you think you’re hourly wage should be).

A $120 pair of shoes at $15/hour is 8 hours of your life. Sometimes that reframe alone answers the question.

Another way to evaluate if you can afford it is to determine how quickly you’d earn the money back.

This method is not fool proof because you should be saving more than you’re spending over time, but it’s still helpful to think about from a financial security perspective.

One thing this framework doesn't catch is irregular expenses. Car insurance, flights home, textbooks and whatever else makes your breathing room look different in June than it does in December. Make sure you’re thinking ahead on not just regular expenses, but upcoming large expenses you know you’ll have to make.

I built a tool that runs the framework above for you in 30 seconds.

No more purchase anxiety. No more buyers remorse. Unless you bought something crappy. Then you may have buyers remorse.

It’s called Worth It. You can try it out here. All you have to do is enter some quick values, and right away you’ll have an answer to whether it’s worth it based on the framework above in under 30 seconds.

As always, none of your data is stored by me. And the tool is completely free! Let me know what you think!

Reduce your purchase anxiety.

Education is power baby. Next time you’re uncertain whether a purchase is a smart decision, do the research you need to responsibly know how much it costs.

Then use Worth It or the framework I provided above to determine if it’s the right purchase to make.

And live blissfully. ;)

Thank you so much for being a part of this newsletter. I am grateful to write to you weekly and I hope this helps you feel more confident with your finances.

If you found this newsletter helpful, please share it with a friend and invite them to subscribe.

I have a goal of helping people learn personal finance. It works better when more people get my emails.

Thank you for helping me (and your friend) out!