Worked Examples
Three real shapes of answer, using the formula above.
The score is the same one the calculator produces — these are what it looks like
before you type anything in.
Can I afford a ₹15,00,000 car on ₹1,00,000 a month?
Take-home ₹1,00,000/mo · essential expenses ₹35,000/mo ·
existing EMIs ₹12,000/mo · savings target ₹20,000/mo · liquid savings
₹5,00,000 · buying in 12 months.
The six-month emergency fund comes to ₹2,10,000, so safe savings are
₹2,90,000 — the rest is spoken for. Monthly surplus is ₹33,000, which over
12 months adds ₹3,96,000. Total purchase capacity ₹6,86,000 against a
₹15,00,000 price.
AI 0.46 · Not comfortably affordable
All five health checks pass here — the emergency fund is 14.3 months, debts are
12% of income, essentials 35%, savings rate 20%, free cash flow 33%. Nothing is wrong
with the finances. The car is simply too expensive for a 12-month horizon, so the
advice is to consider a lower-cost option or delay the purchase. Stretch
the same purchase to 30 months and it clears the affordable threshold.
Can the same person afford a ₹1,20,000 laptop?
Identical finances, ₹1,20,000 price, buying in 6 months.
Safe savings are still ₹2,90,000, and six months of ₹33,000 surplus adds
₹1,98,000. Capacity ₹4,88,000 against a ₹1,20,000 price.
AI 4.07 · Comfortable
Above 3, so no recommendation appears at all. The same income and the same habits
answer one purchase with a clear no and the other with a clear yes — which is the
point of scoring the purchase rather than the person.
Can I afford an ₹80,000 phone on ₹60,000 a month?
Take-home ₹60,000/mo · essential expenses ₹30,000/mo ·
existing EMIs ₹15,000/mo · savings target ₹3,000/mo · liquid savings
₹40,000 · buying in 3 months.
Savings of ₹40,000 sit well below the ₹1,80,000 emergency fund, so safe savings
are zero — not negative. Capacity is three months of ₹12,000
surplus, ₹36,000, against an ₹80,000 price.
AI 0.45 · Not comfortably affordable
Almost the same score as the car, for a completely different reason. Two checks fail:
the emergency fund covers 1.3 months against a target of 6, and the savings rate is 5%
against a target of 20%. The advice is to build the emergency fund before making
this purchase — a cheap item can still be the wrong one when there is no
cushion behind it.
These are illustrations, not advice. Your own numbers are the
only ones that answer the question — the calculator above is free and needs no account.
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