Understanding Purchase Affordability Stress-Tests
What This Purchase Stress-Test Actually Does
This calculator takes a snapshot of your monthly cashflow (income minus bills, debt payments, spending, and savings targets) and adds a new purchase to see how it affects your monthly surplus and, if you have one, a simple savings goal timeline. It builds a few scenarios: baseline (no purchase), buy now (with the purchase), and optionally wait and save (delay purchase until goal is reached). All calculations are based entirely on the numbers you enter—this tool does not access real-time prices, verify loan terms, or account for taxes, fees, or other complex factors. It's a simple stress-test for preliminary exploration.
Why Monthly Surplus and Buffer Matter
Monthly surplus (income minus all outflows) represents how much flexibility you have each month. A positive surplus means you have room for unexpected expenses, opportunities, or additional savings. A negative surplus means you're spending more than you earn, which isn't sustainable long-term. The buffer after required expenses shows how much room you have after covering essential bills and minimum debt payments. These metrics help you see how adding a new purchase might affect your financial flexibility. However, these are simplified snapshots—real financial health depends on many other factors this tool doesn't model.
What This Tool Does Not Include (Interest on Other Debts, Taxes, Detailed Categories, etc.)
This calculator does not account for: interest on existing debts beyond minimum payments, taxes on income or purchases, detailed expense categories, irregular or seasonal expenses, emergency fund status, investment returns, inflation, job security, health insurance costs, retirement savings beyond a simple target, or any expenses you don't explicitly enter. It uses static numbers you provide and doesn't model real-world variability or complex financial situations. This tool is a simple stress-test, not comprehensive financial planning. Real purchasing decisions should consider your complete financial picture, not just this simplified snapshot.
Note: This calculator is for educational purposes only and does not provide financial, legal, or purchasing advice. It does not verify prices, loan terms, or guarantee affordability. It is a simple stress-test based on the numbers you enter, not a comprehensive financial planning service. Always verify actual costs and terms with sellers and lenders, and consider consulting with financial professionals for complex purchasing decisions.
Frequently Asked Questions
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