When you buy something or spend money on anything, you should calculate it by how much time it cost you – not by how much money it costs. By adjusting your currency from money to time, I think you’ll be able to make much better spending decisions.
How to Calculate Your Hourly Worth
If you want to start spending the currency of time instead of money, you’ll need to set an hourly worth.
How much is an hour worth to you? It may be your hourly wage, or it might be another arbitrary number.
To calculate your hourly wage, start with your take home pay. It must be your take home pay since that is actually what you make for the time you give to your company. After taxes are removed, how much money do you bring home an hour? Let’s say the average American brings home $35,000 per year. If that person works 40 hours for 50 weeks (2 weeks of vacation), they work 2000 hours a year.
Thus, in this example, the average American earns $17.50 per hour.
So Why Does it Matter?
Example #1 – Buying Furniture
Example #2 – Couponing / Savvy Shopping
Example #3 – Outsourcing
Obviously, there is a point where all this math breaks down as we all have leisure time and time off the clock, but I think it’s valuable to ask if you want to spend your time on the items you’re buying, or if you wish you could spend less money and have more time in return for your spending savings.
Do you usually think about it as spending time or spending money?