Most households now juggle multiple layers of debt: mortgages, student loans, auto payments, credit cards, and recurring subscriptions. Each piece might feel manageable on its own, but together they can quietly erode your financial stability.

The real question isn’t, “Do I have the money today?” It’s: “Will spending this money today limit my options tomorrow?”

• Under 28%: Excellent — plenty of financial flexibility
• 28–36%: Manageable — but you’re starting to limit options
• 36–43%: High risk — one surprise expense could create real strain
• Above 43%: Danger zone — most lenders see you as overextended

DTI is your starting point. True affordability also factors in emergency savings, retirement contributions, and your ability to handle financial shocks without panic.

On a $5,000 monthly income, a $2,000 purchase is 40% of your monthly pay. Even if you pay cash, that one swipe can:

• Drain your emergency fund
• Delay investing or debt payoff
• Reduce your flexibility for months

Remember: every large purchase has an opportunity cost. That $2,000 could be months of retirement contributions, a stronger emergency fund, or breathing room when life throws a curveball.

Consider a typical stack:

• Streaming: $15/month
• Fitness app: $30/month
• Meal kit: $120/month
• Phone plan upgrade: $85/month

Total: $235/month → $2,820/year.

Unlike a one-time purchase, subscriptions increase your DTI every single month. They quietly reduce your future options and make it harder to absorb surprises.

For One-Time Purchases

• Calculate the purchase as a % of your monthly income
• Make sure you’ll still have 3–6 months of expenses in your emergency fund afterward
• Confirm your current DTI is under 36%
• Ask: “Will this still feel worth it six months from now?”

For Recurring Payments

• Add the new payment to your monthly debts and recalculate DTI
• Keep DTI under 36% (ideally under 28%)
• Look at the annual cost, not just the monthly
• Ask if it truly adds value or is just another slow leak

Money stress shows up as anxiety, lost sleep, tension in relationships, and distraction at work. Living paycheck-to-paycheck — even with a good income — keeps your nervous system in “alert” mode.

Smart affordability decisions aren’t about deprivation. They’re about freedom:

• The freedom to handle an emergency without panic
• The freedom to say “yes” to an opportunity
• The freedom to build wealth, not just manage payments

1. Calculate your current DTI. Include rent/mortgage, loans, and minimum card payments.
2. Audit recurring expenses. Cancel subscriptions you don’t use or truly value.
3. Prioritize your emergency fund before big, non-essential purchases.
4. Use the 48-hour rule for larger purchases: wait two days before you buy.
5. Run the numbers with the Can You Afford It? Calculator before you commit.