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Personal finance experts have different ways to help consumers determine whether their purchase aligns with a healthy financial future.
Heres how he and other experts make big-money decisions.
Ramsey explains, If I took this much money and set fire to it, does my life change?
If the answers yes, then its too expensive.
This method works because it helps Ramsey put the purchase into perspective.
Ramit Sethi, another financial expert, cautions that monthly payments arent everything.
Sethi points out that phantom costs will inflate what you pay each month.
For a car, these include registration fees, car insurance, gas and maintenance.
To determine if you’re free to afford something, Sethi explains that you must use actual numbers.
Suze Orman, afamed finance expertand podcaster, insists her audience members take accountability for their finances.
Ramsey echoes this warning.
By asking this, he can determine the underlying reasons for making the purchase.
If hes buying something to attractattention and envy, it will lead to financial danger.
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