Been thinking about this a lot lately — how do you know if you can afford something? It's honestly the question everyone asks themselves before dropping money on something big. A car, a house, that vacation you've been eyeing. Even smaller purchases can mess with your peace of mind if you're not intentional about it.

I came across Dave Ramsey's take on this and it actually breaks down into something pretty straightforward. He calls it the SMART approach, and it's worth walking through because most people skip at least a couple of these steps.

First up is self-awareness. Real talk — will you actually use it? I think we all have stuff in our closets that seemed essential at the time but just sits there collecting dust. If something won't genuinely add value to your life, the price tag doesn't really matter. You're just throwing money away either way.

Then there's your motive. This one hits different because we're all guilty of this. You see someone on social media with something, or your neighbor gets the new version, and suddenly you want it too. That's not a purchase decision, that's comparison. And comparison spending is how people end up stressed and broke. You need to be honest about whether you actually want something or if you're just chasing what someone else has.

Affordability is the obvious one, but people get it wrong. It's not just about whether you can technically buy it — it's whether you can buy it without financing it. No BNPL plans, no loans, no stress. If you need to finance it, you probably can't actually afford it yet. That's the real test.

Before you pull the trigger, you should also ask yourself: is this actually the best option out there? How do you know if you can afford something if you haven't even shopped around? Comparing prices and brands takes time but it saves money and prevents buyer's remorse. Do the research.

And finally — timing. Just because you want something now doesn't mean now is when you should buy it. Sales happen, prices drop, your situation changes. Sometimes waiting is the smartest financial move you can make.

If you're still on the fence, there are some solid tactics. Set a waiting period first — give yourself days or weeks before committing. That alone kills a lot of impulse purchases. You could also build a sinking fund, where you set aside money each month specifically for that purchase. By the time you have enough, you're not stressed about affording it.

Other options: pick up extra income through a side gig, cut expenses elsewhere to free up cash, or just get serious about budgeting. A real budget shows you exactly where your money goes and whether you actually have room for that big purchase. Most people don't even know how do you know if you can afford something because they've never sat down with actual numbers.

The core thing here is being intentional. Don't let impulse or comparison drive your spending. Run it through these questions, do the work upfront, and you'll make way better financial decisions.