GOOD READS

Can You Afford It? There's An App for That.

If you have your eye on a new car or luxury vacation but you're wondering whether you can really afford it, a new app can help you decide. "Can I Buy?" designed by the husband-and-wife team behind the Massachusetts-based developer Sqube, tells you whether or not you should purchase the item of your dreams after making calculations based on your savings, income, expenses, and debt.

The app is reminiscent of Suze Orman's popular show segment, "Can I Afford It?" A viewer explains his financial situation and what he wants to buy, and Orman denies or approves the purchase. But unlike Orman's segment, which is available to only a select few chosen to be on her show, anyone can download the "Can I Buy?" app for $1.99.

Beena Katekar, one of the app's creators, along with her husband, Sudhansu Samal, says she got the idea for the app after going shopping with her five-year-old daughter. "Every time you take her to the shop, she wants to buy a toy. We kept saying, 'no, no, no,' and she asked, 'Why not?'"

To answer their daughter's question, Katekar and Samal made a simple program on their iPhones that compared how much money she had in her piggy bank to the cost of the toy she wanted. If it costs more than the amount she had saved, the program said, "No." But if she had enough, it said, "Yes." That soon made trips to the store easier, says Katekar, because "it's not mama and papa saying no, it's the app saying no!"

Katekar and Samal soon worked to develop a more complex app for grown-ups. The current version asks the user to enter total monthly income, monthly expenses, retirement savings, other savings, credit card debt, other debt, and any investments. Then, the user names his dream purchase and how much it costs, and the app offers an answer: approved or denied. A brief explanation tells the user that he simply doesn't have enough liquid savings, or he has too much debt.

When I told the app that I wanted to buy a $1,500 diamond ring, that I earned $3,000 a month and pay $2,000 in expenses, and that I have no debt, no investments, and $25,000 in savings, it smiled on my purchase: "Approved," it said, because my liquid savings exceeded nine months of expenses and my monthly income exceeded my expenses. (It did add, though, that I should ramp up my retirement savings, because at age 32, it said, I should have accumulated $67,294 already.)

Then, I tested it with a more indulgent question. Could I buy a $25,000 new car, with the same financial stats? It approved that purchase, too, for similar reasons. But when I tweaked my stats to say I was carrying $2,000 in credit card debt, it quickly reversed course: I could no longer afford the car, it explained, because I lack sufficient liquid savings (perhaps it subtracted my debt from my savings account).

The app suffers from a few quirks. When I had no credit card debt, it approved me to buy a $100,000 sports car, even though I said I was only earning $3,000 a month, because I had more than nine months' worth of savings in my bank account and my monthly income exceeded my expenses.

The app could also benefit from better explanations for its reasoning, a shortcoming the developers say they are working on. "The feedback is that some people are not clear on why [a purchase] is denied or approved, so we will add more clarity on that. We are refining it every day," says Katekar.

Numbers and logic are one thing, but could the app ever incorporate higher-level sophistication, such as helping a user determine if a purchase is in line with his values and bigger goals? I might be able to afford a new diamond ring or even a sports car, but if my passion lies in travel, should I buy those more materialistic items? Katekar says she would like to eventually incorporate that kind of higher-level thinking into the app.

In the meantime, while the app feels as though it's missing some complexity, it's still useful as a handy check-up for anyone mulling over a big purchase. At the very least, Katekar points out, it forces users to collect their own financial data so they can enter it into the app, such as their total retirement savings and expenses. And when it comes to denying children's shopping requests, it's always easier to blame the app.

Twitter: @alphaconsumer



More From US News & World Report

Quiz: How well do you know India's economy?

Question 1

Which of these products is India the world's largest producer of?

Poll Choice Options
  • Wheat
  • Rice
  • Milk
1
2
3
4
5
6
7
8
9
10

Latest News

  • L&T calls off merger talks with Future Generali Insurance
    L&T calls off merger talks with Future Generali Insurance

    Larsen & Toubro Ltd said on Monday its unit had called off talks with Future Generali Insurance, a joint venture between local retail chain operator Future Group and Italy's Generali , to merge their businesses. ... …

  • Improve Assam's power scenario: Gogoi to discom

    Guwahati, April 21 (IANS) Assam Chief Minister Tarun Gogoi Monday reviewed the power situation in the state and asked the Assam Power Distribution Company Limited (APDCL) to take immediate steps to meet the shortfall of power. Assam has not been receiving adequate power from hydro power generating stations - including Ranganadi, Kopili, Khandong, Doyang and Loktak - due to low water levels in the reservoirs caused by drought-like conditions prevailing in the northeast region for the last few …

  • Wall St opens flat as earnings deluge looms

    U.S. stocks opened flat on Monday as investors found few reasons to keep buying following a strong rally last week and ahead of a heavy week of corporate earnings. The Dow Jones industrial average rose ... …

  • Petronet seeks bids to lease storage at Kochi LNG plant

    India's biggest gas importer Petronet LNG (PLNG.NS) has invited bids to lease storage at its Kochi regassification plant in Southern India due to a lack of pipelines connecting its key demand centres, its head of finance said. Petronet is currently operating its 5 million tonnes a year Kochi plant on the east coast at a fraction of its capacity as land-related issues have delayed the two pipelines that would link the terminal with customers in Bangalore and Mangalore. "Timeline for building …

  • SC reserves order on Subrata Roy's plea against judicial custody, new  …

    New Delhi, April 21 (IANS) The Supreme Court Monday reserved its order on Sahara Group chief Subrata Roy's plea challenging its March 4 decision to send him to judicial custody for his failure to comply with its 2012 order to return investors' Rs.24,000 crore which his two companies - SIRECL and SHICL - had collected. A bench of Justice K.S.Radhakrishnan and Justice Jagdish Singh Khehar also reserved its order on Roy and two other group directors offer to pay Rs.10,000 crore as a part payment …

IN-DEPTH ANALYSIS & INTERVIEWS

  • This might well be India’s biggest Ponzi scam

    It was just too good to be true. Ashok Khital, 45, displays every symptom of a man who knows he's been conned. …

  • India's star studded football league

    High and mighty including Sachin, Salman & Sun Group buy ISL teams …

  • Leaderspeak with Rajesh Janey

    Rajesh Janey, President - India & SAARC, EMC shares many firsts in his life. …

  • Power Hungry

    Gujarat has power round-the-clock. Most other states do not. Why this will matter in the general elections. …

  • Etcetera

    The most keenly watched contest of the current general election will be the one for the Varanasi parliamentary seat, where the Bharatiya Janata Party's prime ministerial hopeful Narendra Modi squares off ... …

  • Economy vs Democracy

    As the country gets election fever, cash comes out of mattresses and turns into liquor, gifts, and food. But it is not bad for the health of the economy, reports Sarika Malhotra from the trenches. …

  • Bracing for Challenges

    Raghuram Rajan is preparing to deal with concerns that may arise when a new government takes charge. …

MARKET MOVERS

  • Most Actives
    Most Actives
    NamePriceChange% Chg
    53.15+5.50+11.54%
    HCLINFO.BO
    16.17-0.35-2.12%
    UNITECH.BO
    14.26+0.90+6.74%
    SUZLON.BO
    21.20+3.05+16.80%
    HOTELEELA.BO
    201.80+9.20+4.78%
    SSLT.BO
  • Price % Gainers
    Price % Gainers
    NamePriceChange% Chg
    105.30+17.55+20.00%
    SHASUNPHA.BO
    79.85+13.30+19.98%
    JUBLIND.BO
    15.51+2.58+19.95%
    HIMIN.BO
    29.90+4.95+19.84%
    SOMICONV.BO
    19.80+3.25+19.64%
    ORIENTP.BO
  • Price % Losers
    Price % Losers
    NamePriceChange% Chg
    11.500.000.00%
    4THGEN.BO
    17.300.000.00%
    ALFAICA.BO
    16.150.000.00%
    CJGEL.BO
    10.460.000.00%
    COSBOARD.BO
    22.000.000.00%
    EMAINDIA.BO
  •  
    Recent Quotes
    Symbol Price Change % ChgChart 
    Your most recently viewed tickers will automatically show up here if you type a ticker in the "Enter symbol/company" at the bottom of this module.
    You need to enable your browser cookies to view your most recent quotes.
  • Recent Quotes News

    •  
      Sign-in to view quotes in your portfolios.

    Yahoo Cricket