The verb ‘to afford’ means to have enough money to be able to pay for something. More specifically, it means to be able to pay for it comfortably. In other words, to buy something and have enough money left over to carry on financially without getting into difficulties.
The word also means to supply or provide a facility or opportunity. For example, if I say: “The balcony affords beautiful views of the bay,” it means ‘provides.’
We can use the term for either money or time. In both cases, it means to have enough time or money spare so that giving it up would be possible and would not hurt too much. For example, if I say: “I could not afford the time off work to visit her,” I mean I did not have enough spare time.
Some languages do not have an exact, single-word, translation for ‘afford.’ In Spanish, for example, the translation is ‘permitirse el lujo,’ which literally means ‘to allow oneself the luxury.’
The Oxford Living Dictionaries have the following definitions of afford:
“1. Have enough money to pay for. 2. Have (a resource such as money or time) available or to spare. 3. Provide or supply (an opportunity or facility).”
I have the money but cannot afford it
Let’s imagine Susan wants to buy a car. She has $20,000 saved up and cannot take out another loan. Her salary is just enough to pay her mortgage, utilities, credit card bills, and other expenses to get by.
Susan is worried about her job. She works in a widget factory. Over the last five years, 30% of all the widget factories in her country have closed down.
She goes to a car showroom and sees a car she likes, the ACME 2000, which is exactly what she is looking for. It is selling for $20,000.
Susan has the $20,000. However, if she uses that, she will have no financial cushion to tide her over if she loses her job. So, she says: “I would love to buy that car, but I don’t think I can afford it.”
This is an example of not being able to afford something even though you have enough money to buy it. In this sense, the word means not only to have enough money but also to be able to take the financial hit comfortably or easily.
Afford – affordable
The adjective ‘affordable’ means able to be rented or purchased by individuals who do not earn a lot of money. When politicians or economists talk about affordable housing, they mean homes that people of modest means can afford.
Marketing executives, before they launch a new product on the market, must make sure it is affordable. In other words, they must be sure that their target consumers can afford it, i.e., have enough spare cash to buy it.
Afford vs. willingness to pay
To be able to afford is not the same as ‘willingness to pay’ or WTP. WTP is the most that consumers will pay for something. They may be able to pay a higher price but refuse to do so.
Put simply; how much you can afford is your capacity rather than your choice, while WTP is your choice. Somebody, for example, could say: “If I had more money, I’d buy it, but I cannot afford it.” In this case, their WTP is not the problem.
A billionaire can easily afford to pay $50 for a sandwich. However, his willingness to pay is $10. In other words, he won’t pay more than $10 for it.