How do I buy stuff I can’t afford?

how much car afford on income credit score

You may be thinking about buying things you currently can’t afford — or don’t think you can afford, yet. Would you like to buy a home, new car, or go on vacation? What about a college education? Maybe you’re saving up for a divorce, retirement or want to pay off debt.

Whatever your goal, take action steps to get there. Seek ways to earn more, save money through frugal living and budgeting, and consider financing options.

This post will help you understand what you can afford based on your budget, how to increase your income, improve your credit score and, possibly, finance your purchase. I also help you understand how your mindset is holding you back — and how to overcome your own limiting beliefs.

It all boils down to thinking differently, finding ways to save, increasing your income, budget, and keeping the company of people who motivate you.

Once you save your money, you can buy anything you want. BOOM.

How can I afford it?

Your brain is the first place to start.

You might be in your head thinking, ‘I make $X each year. I can’t afford to buy a house / car /vacation / retirement / pay off this debt / leave this man already!’

The first step is get out of your own way. Negative thoughts, and surrounding yourself with people who keep you stuck, are often a part of the equation.

Mamacita, if you grab hold of these practices, you can afford to buy a house, a car, pay for a vacation, fund a divorce, build your retirement savings, or pay off debt.

Try these  exercises to shift into a sense of abundance that will allow you to achieve your financial goals:

  • Daily affirmations An affirmation is a positive statement that speaks to your goal as if it has already happened. Example: “I am so grateful and excited now that I can afford _________”… fill in the blank. Notice how you feel when you say and write these statements. Imagine what it is like to sit in your new home. Close your eyes and FEEL how amazing it is to know you are on track for a comfortable retirement.
  • Identify what you want to afford. Write five affirmations down. Practice saying them in the mirror.
  • Invest in personal development  Listen to a daily podcast about wealth. Read books on career development. Follow positive influencers on social media whose advice aligns with your goals. Therapy can be a great tool for changing the roots of what holds you back. Check out online therapy apps, which are much more affordable and convenient for working with licensed counselors. BetterHelp is a leader in online therapy >>
  • Visualization Create a mental picture of what your life looks like when you have what you want. Take a walk in your dream neighborhood. Get your senses in on this! Make a vision board on Pinterest and add to it daily.
  • Surround yourself with positive, ambitious people. You cannot change your life if you spend time with people who are stuck in your old mindset. Studies find that if you hang out with people who smoke, you are more likely to smoke. Overweight people have overweight friends. Want to improve your finances and lifestyle? Hang around like-minded people who are driven to earn more. Millionaire Single Moms is Emma Johnson’s closed Facebook group devoted to positive, big-thinking single moms (no income requirements!)

Cut your expenses

You already know the standby advice, like making  your coffee at home instead of buying it for $4 per cup at Starbucks. Use a meal delivery service or coupons and apps like Ibotta to reduce your grocery bill.

There are also some great bill negotiation apps that can help you lower your monthly subscription services, and negotiate your phone, Internet, cable or other bills — for you.

Legitimate bill negotiation services include:

  • TrueBill — A leader in the bill negotiation space, TrueBill is a secure, legit service that will identify and help you cancel or reduce recurring bills like iTunes, Hulu, SlingTV, cable, Internet, cell phone, BlueApron or even Plant Fitness (face it—you never go!). TrueBill is 100% free unless they negotiate down a bill, in which they take 40% of the savings. Check out TrueBill now >>
  • Arcadia Power — This green-energy marketplace automatically identifies the lowest renewable energy provider, and switches you as prices change — keeping your bill as low as possible.
  • BillBargain — Bill negotiation service that helps you cancel unused bills and negotiates monthly bills such as cable TV or wireless Internet on your behalf.
  • BillShark — Bill negotiation service finds savings for cable, satellite, wireless and security services, nad identifies and cancels subscriptions you no longer want or use
  • Trim — Combination of services including bill negotiation, cancellation of unwanted subscriptions, spending analysis and recommendation of financial products.

Earn more money

The best way to have more money is to make more money!

You can negotiate a higher salary or promotion at your current job, find a new, higher-paying job (studies find this is where the big pay increases happen), get a side job, start a side hustle, or sell things you already have, but no longer use or like.

How to earn more income with a side gig or hustle

You deserve the life you go after. Need more cash flow to make it a reality? Earn more money with a work from home job for single moms to supplement your income — or build into a big business. Work-at-home careers for moms listed in this guide include:

  • Bookkeeper
  • Virtual assistant
  • Social media manager
  • Clinical research coordinator
  • Programmer / coder
  • Graphic designer
  • Freelance writer
  • Grant writer

Earn money taking surveys in your spare time with Prize Rebel, or tutor online from home earning $22/hour or more with VIP Kid. (Read: my VIP Kid review)

For more work-at-home opportunities: FlexJobs Review: Does this site really find high-paying work-at-home jobs?

Still looking for ways to make money? Try the job search tool Steady

How to make money selling stuff you have

There are so many things to sell to a pawn shop that might be laying around collecting dust, such as estate jewelry or gold coins or jewelry. Your down payment for a new car might be in your attic or jewelry box!

Related posts on selling stuff to make extra money:

Should you sell your engagement ring (or wedding band) after divorce?

How to feng shui every room in your home (and make money at the same time)

Simplify your finances

Recently, I’ve been reading The 12 Week Year to help me manage big tasks over a short period. It’s really been a big help.

For example, to buy your first car, break your goal down into smaller tasks like calculating how much you need to save weeklyfor a down payment. If you focus on the need of $3,000 for a downpayment, that might be so overwhelming you don’t even try. But divide that sum by 52 weeks in the year, and you realize that $57 per week to reach that goal is very doable.

Other tips include:

  • Set up a simple budget
  • Use an app like Personal Capital that pulls all your accounts into one screen, helping you understand exactly where your money goes
  • Change your bill due dates to the same day — no more confusion, missed deadlines or chaos
  • Consolidate credit cards to avoid paying multiple bills.

How do I afford a divorce? The average divorce costs $15,000 — and that is just for the initial separation. If you are thinking of leaving your marriage, you likely also need to consider the expense of managing two homes on an income that once managed just one home — plus, possibly, the cost of child support and/or alimony, as well as extra child care expenses.

How much is a divorce?

The cost of a divorce can range from under $500 for a DIY filing, into the tens of thousands of dollars. Typically, the more money you and your soon-to-be spouse have, the more a divorce can cost. Get a general idea of the cost by contacting local divorce or family law attorneys through free or discounted initial consultations.

Get a divorce settlement agreement + lawyer consult >>

Online, DIY divorces services like Rocket Lawyer, LegalZoom, Avvo and Justia provide free legal information searchable by state. Check with the school of law at your local college or university. Some offer free legal clinics to the public.

If your breakup is more or less amicable, with few assets and a general agreement about how time sharing with any children will be established, do-it-yourself online divorce services can be a great option. This is an option for uncontested divorces — where both parties agree on major decisions about child custody, spousal support and how assets are divided

Here is our list of the top online DIY divorce services.

If you’re going DIY, you will need to:

  • Check with your state and city or county clerk of the court to understand paperwork submissions and filing fees.
  • Choose a reputable document preparation service like Rocket Lawyer or use free resources provided by your state, city or county.
  • Create a detailed account of your divorce. Provide documentation about all parties, vital records, and decisions about child custody, support and property division.
  • Know the process and cost of serving your spouse. According to Oregon-based National Association of Professional Process Servers, the average cost is between $20 and $100.

If using an attorney, mediator or a collaborative divorce option, ask about fees, hourly rates or retainers up front. Cut costs by hiring a lawyer to handle a portion of your divorce such as preparing or reviewing documents. Read our Rocket Lawyer review >>

How do I afford a car?

Whether you need to replace a junker, buy the car of your dreams, or just find a reliable vehicle within your budget, affording a car can be challenging.

The first step is to decide how much car you can afford — not figuring out how to buy the luxury ride of your dreams.

First, use a car affordability calculator on sites like NerdWallet or Edmunds that take into account details such as:

  • Monthly payment
  • Down payment
  • Trade-in value of your current car
  • Sales tax
  • Interest rate
  • Length of payment term
  • Vehicle price

A big part of getting the car you want is knowing your budget. Ask yourself, ‘How much car loan can I afford?’ You might also consider buying without financing — a good option for less expensive cars.

Do you have anxiety about negotiating your own deal? Not sure how to buy your first car? I will help you break it down. TrueCar and Kelley Blue Book. These are services that give you in-depth data on pricing and long-term value.

Not sure what car you want? U.S. News & World Report listed the 25 most reliable used cars under $10,000 in May 2019 including everything from subcompact cars to SUVs.

Questions to help you afford a car:

1. Do I want a new or used car?

The reasons to buy a new vs. used car are more complicated than many people realize.

On the surface, it may seem like you should buy a new car if you can afford the monthly payments, or buy the used car if you are strapped for cash.

But the equation is far more complicated:

New cars are often easier to finance — and at a lower rate. Today, with interest rates so low, it may make sense to finance your vehicle — even if you have cash (because you can likely earn more in an interest-bearing account or investment than you will pay in APR on an auto loan).

BUT, new cars always take the new-car penalty, losing 15% or more off their price the moment you drive it off the lot.

A quality used car can be an excellent option — though you will pay a higher interest rate than a new car should you finance it.

Also, an older car requires more time and money to maintain it — which is a huge downside.

2. Should you finance a car purchase — or pay cash?

Deciding whether to pay cash or finance a car? Consider:

  1. Do you have enough cash? This may seem obvious, but even if the answer is ‘yes’ the question is really: Can you afford to pay cash for a good car? Because even if you buy an $7,000 vehicle with no loan, you may have to invest time and mone in repairs and maintenance of an older car.
  2. What is the total cost of the car? Again, financing a new car will likely come with a lower APR than a used car. However, calculate the entire cost of the car over the length of the loan to understand your total out-of-pocket expenses. In other words: Just because you can afford the monthly payment does not mean that the purchase is a good value for your budget. In fact, a shorter-term loan like 36 months may come at a lower APR than a 60-month loan, so your total expense for the car, plus financing, will be lower.

How do I finance a finance a car?

Check your credit score. This will determine the size of the car loan, and at which price.

Get your free credit score from Credit Sesame >>

If your score is lower than 700, take steps to improve your credit score. The Credit People is a great, honest resource for credit repair. (Read: The Credit People review)

How do I negotiate a car price?

It can be intimidating to negotiate the price of the car you have identified. Here are some tips for making sure you get the best price for the car you choose:

  1. Secure an online lender before sitting at the negotiation table. This gives you a hard budget and interest rate to compare once a car dealer makes an offer.
  2. Ask about Guaranteed Asset Protection (GAP) insurance when financing a car. Good GAP insurance covers any outstanding costs outside of your auto insurance benefit if the car is totaled.
  3. Check out CarFax, where you can find used car listings, do a background check on the VIN, and present a 100% haggle-free price.

How do I afford a house?

If you are considering a divorce and own a home jointly with your spouse, research whether you can actually afford to keep the house with ease (fighting for a house you cannot afford is one of the top mistakes women make when they separate or divorce)  keeping the house. Home affordability calculators like this one at Zillow can help.

How much mortgage can I afford?

My father always told me never to be “house poor.” This means to leave room for other expenses aside from your mortgage payment: Retirement, daily living, and otherwise enjoying life.

Lenders often use the 28/36 rule to determine how much house you can afford. According to Investopedia, you should max out at 28% of your gross monthly income on housing expenses and spend no more than 36% of your total income on your combined debt, including student loans, credit card balances, car notes and personal loans.

Check out this debt-to-income ratio calculator at Bankrate.

How to save for a house downpayment?

Typically, a mortgage lender wants you to have 20% of the purchase price for a downpayment. If you have less than that, you will pay private mortgage insurance, or PMI, which is around 1% of the total loan amount. So, if you are financing $200,000 for a condo, you would pay $2,000 per year in PMI, or $167 per month. According to U.S. News, the average downpayment for a home is around 11%

If you do not have cash on hand for a home downpayment, consider:

  • Taking on a side hustle to earn extra cash
  • Dramatically cut expenses
  • Sell unused goods, including jewelry, clothes and furniture
  • Research $0-down programs, including those from the VA, USDA, your local credit union, those for physicians, and other special mortgage programs.

Tips for buying the right house for your budget:

  • Establish a timeline for purchase — If you purchase a year from now, you can save for your down payment. Ideally 20% is the goal, but save as much as possible. A hefty down payment will reduce your mortgage payments.
  • Get prequalified first — This will give you a concrete number. When you get closer to your purchase (about 90 days out), get pre-approved. Pre-approval requires a credit check and is a verifiable document showing you can afford a specific loan amount.
  • Raise your credit score — Pay down debts, pay on time and make sure you don’t have errors on your credit report. Use Credit Sesame or Credit Karma to check your credit score for free.
  • Choose the best loan term for your needs — Longer terms will have lower payments, but you will pay more interest and often a higher rate. Shorter terms have a higher payment, but you save on interest and often can enjoy a lower rate. Commit to fixed interest rates, and avoid adjustable rates or balloon payments.
  • Be flexible — If you are open to different neighborhoods or features of the home you can save money. If you can live without a fourth bedroom or a deck now, you may be able to do additions later as your finances permit.
  • Interview agents — Call around and ask questions to find your ideal realtor. A realtor with your best interests in mind will stick with properties you can afford and help you avoid properties with extra costs, such as homeowners association (HOA) fees. Good agents will also have relationships with local mortgage brokers who might be able to help you find a great loan.

How much rent can I afford?

Not ready to buy? Planning on moving soon? There are many good reasons to rent, instead of owning your home.

In general, it is advised that your rent should not exceed 30% of your take-home pay. This rent affordability calculator can help you make a budget when shopping for your next home.

When making your housing budget consider:

  • Move-in costs, including security, and first and last-month’s rent
  • Broker’s fees
  • Moving costs, including hiring a truck and movers and packing supplies
  • Ask the landlord or previous tenant the average electric, heating and other utility costs
  • Are there facilities on the property like a gym, pool, office space? If you currently pay membership fees for these extras, this can add up to cost savings if these features are bundled into your rent.
  • Distance to work, school and other places you frequent. Time is money. And driving time also costs you in gas, wear-and-tear on your car

How can I afford to take a vacation?

Vacations can be a huge expense, but if you can easily afford to get away without going into debt, here are some ways to set a budget, save for vacation, and enjoy quality time with your family, boyfriend — or alone!

How to set your vacation budget

  • Start saving for your vacation even before you decide on a destination
  • Estimate costs for travel, lodging, food and entertainment online
  • Be flexible in your destination: Pick a handful of destinations and compare costs
  • Choose a maximum dollar amount you are willing to spend and stick with it
  • Set up a dedicated savings account for travel
  • Use points from credit cards, hotels, and airlines towards your vacation.
  • Save money in a high-interest savings account.

Open a savings account today with CIT Bank >>

How to find affordable vacation options

  • Call vacation properties, hotels and bed & breakfasts to ask about unadvertised specials
  • Skip traditional lodging and choose options like hostels, Airbnb, or HomeExchange. Related: 7 tips for taking a road trip with kids
  • Book flights midweek for savings on domestic travel online Travel off-season or mid-week (peak times are often weekends and holidays)
  • Use discount sites like Groupon and Hotwire
  • Stay with friends or family who live near vacation destinations
  • Read bargain travel forums on sites like TripAdvisor
  • Follow cheal-travel  blogs for good deals
  • Research all-inclusive resort or cruise deals. Sometimes they are a better deal than booking separately, or renting a house and preparing your own food — but not always

Tips for how to save for a vacation

  • Plan a year out and save monthly with an automatic savings deposit
  • Use interest-free payment plans with travel agencies
  • Set up a vacation registry as your preferred gift at birthday parties
  • Plan to split the cost with your fellow, magical single moms (did someone yell girl’s trip?)

How can I afford to retire?

If you haven’t taken time to set up a retirement account, this is your official nudge. If you already have one, make sure your contributions reflect the lifestyle you desire. The U.S. Department of Labor claims that less than 50% of Americans haven’t calculated how much they need to save for retirement. Don’t be in that number.

Try this retirement calculator

Use this retirement calculator from smartasset for guidance based on where you live. If you plan to relocate, you can get a feel for the cost of living in your area of choice.  

How to start investing for retirement:

  • Savings plan — set up an automatic savings plan that transfers money from checking to your investment accounts at regular intervals to your 401k, IRA, or brokerage or robo-advisor account, including Ellevest or Betterment.
  • Max out employer match — many employers offer to match your 401(k) contribution up to a certain percentage. If they match 10%, then contribute at least 10%. Some employers require a vesting period to keep the matched contributions.
  • Simplify your finances and reach your goals — Consolidating credit cards, automating payments and having a true view of your bills will make it clear how much you can afford to store away for retirement.

Related: How to get started investing for women

How can I afford to pay off my debt?

Be honest with yourself. Accepting facts about your finances goes a long way. Acknowledging emotional anxiety about debt is a great first step — own it, but take steps to transform it.

  • Make a list of debts and expenses. Eliminate unnecessary expenses, like that streaming service you never watch. Try bill negotiation services like Arcadia Power, BillBargain, BillShark, or Trim to save money on utilities and recurring bills to free up more capital for debt payoff.
  • List the balance, interest rate and minimum payment for each debt. Figure out how much money you can put toward your debt payoff plan using a budgeting tool like Tiller.
  • Choose a debt payoff method. Small debts first or high interest ones? Paying off a small debt could be just the win you need, but if you’re more concerned about finance charges, focus on attacking the high-interest debts first. Set up an automatic payment that is higher than the minimum payment to pay down the principal faster.
  • Research cards and loans with lower APRs and fees. Transferring balances from higher rate debts might be a good move. Instead of worrying about multiple payments, you can focus on one.
  • Sell stuff using apps like ebay or take valuables to a pawn shop to drum up extra loot. Have a yard sale. Set up at a community flea market. Sell your crafts. The possibilities are endless!
  • Earn more money. Pick up a side gig and dedicate the income specifically to your debt. Search for work from home jobs for single moms to clear extra cash.
  • Turn to the pros. Work with a credit counseling service. You can access reputable counselors through National Foundation for Credit Counseling. Check your credit before contacting a counselor. Some services require a score of at least 700.

Related: 9 steps for single moms to pay off debt for good

Ways to improve your credit

Paying off debt is a good way to boost your credit score. Your debt to income ratio is just one factor that determines your score.

The higher your credit score, the more access you have to low percentage financing options and perks like no money down or interest-free loans. Here’s a breakdown of credit score ranges:

  • Over 750: Excellent
  • 700 – 750: Very good
  • 650 – 700: Good
  • 600 – 650: Poor
  • Below 600: Very poor

Check your credit score now with free sites like Credit Sesame. There are steps you can take to build credit fast and raise your credit score today. Did you know you can request a copy of your credit report annually for free? Visit Annual Credit Report online to learn more.

Clean up credit report errors yourself

You can dispute errors using tools provided through Equifax, Experian and TransUnion. Removing errors from your report can raise scores quickly.

What about credit repair companies? Are they legit?

There are fee-based credit repair services that will do all of the heavy lifting. Repair your credit by contacting The Credit People, a credit repair service mentioned by the Wall Street Journal, Smart Money, and The New York Times.

Learn how to consolidate debt

A good method for paying off debt is to consolidate all your debt into one loan. That loan may have a lower interest rate, better repayment terms, and is easier to manage than multiple credit card, car personal loan, student debt and other outstanding debts.  

How to consolidate your debt:

  • Consolidate credit card debt — Research nonprofit credit counseling services. Some services require you to close all accounts so keep your options open. Maybe open a new credit account with a better interest rate and transfer your balances.Two places to start your search for a reputable credit counselor:
  • Debt consolidation loan —  Our list of top debt consolidation loans are in this post.Student loan refinancing — Use services like Purefy and SoFi to save money and pay your loan off faster.
  • Personal loan for debt consolidation — Get a loan from your bank or credit union to manage debt. Keep accounts open to boost credit scores, but don’t use them. Check out Prosper to learn if a personal loan is right for you.

Knowing the best money saving tips for single moms won’t help if you don’t put them into practice.  Being able to afford anything starts with a plan and is manifested in action. Go after the life you want so you can start winning and keep winning.

About Robyn Evans

Robyn Evans is an award-winning writer, inspirational author, and occasional songstress (especially in the shower). Born and raised in Baltimore, she focused on helping women make healthy choices for body, mind and soul. She’s a grateful bonus mom to a photographer son and activist daughter and works with young writers through a non-profit organization. Robyn writes for corporate clients, is a former feature writer for The Carroll County Times, has written for The Baltimore Sun and is the author of three books. Learn more about Robyn here.

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