If you’re trying to cut down on impulse purchases (or just purchases in general), it can be constructive to frame the price in terms of how many hours at work it’ll cost you.
Even if you enjoy your job, we’re willing to bet you enjoy not being at your job more. This simple mental hack can help you cut down on overspending my framing purchases in terms of how much time you spend at work to afford the purchase. First, you need to find your hours-to-purchasing-power amount.
- Start with by grabbing a recent pay stub or two (or just checking the direct deposit amounts with your bank’s web portal). The number we’re interested in is the amount of money you take home from work after taxes, retirement deductions, and so on. For the sake of example, let’s say you take home $1,298 every two weeks.
- Divide that number by the number of hours you worked in that pay period. Assuming you worked two 40-hour weeks for the sample wages above, that works out to $16.23 of take-home pay per hour worked.
- Round the number down. Even if it’s close it is to the next whole dollar value, we recommend you round it down anyway to keep your estimation conservative. In this case, we round down to $16.
Whatever number you arrive at (in our example $16) is the amount of available non-tax/non-invested income you have to use on purchases and expenses for every hour you work.
Every purchase big and small can now be framed within the context of hours-to-own. Tempted to buy that Blu-ray boxset when you’re wandering around the mall? If it costs $120 and your effective hourly wage is $16, that’s 7.5 hours of work (almost a whole shift) of labor. Are you looking at a seat upgrade fee on your next flight? If the upgrade fee is $99, that’s a little over 6 hours of work at $16 an hour. Eat lunch out every day at work instead of packing it in, to, say, the tune of $15 a meal? You’re spending an hour of your daily labor on lunch.
If those things are worth it to you, then, by all means, spend the money. But when you reframe purchases in terms of how many hours you need to work to make them, it quickly puts things into perspective and helps you more easily decide if something is really worth it—or if you’d rather save the money to spend on something that brings you more happiness.