This article on deciding if something is worth the price is just one of the many articles we have on finance. From budgeting to learning to save (and what to do with those savings), check out our finance section!
Often we spend money without thinking through the real cost to our budget. Life gets busy and it is easy to be quick to spend and not have much to show for it. There is a way to truly count the cost and weigh the choice quickly before you reach for your wallet and spend. This tip will enable you to make a quick calculation and decide if the purchase you are about to make is truly worth the price of your hard-earned money. Plus, you may find this concept will help you to save money at times too.
Work is a part of life. Spending the money we earn is usually not a hard task but spending it wisely or saving it is usually more difficult. One way to count the cost of what we purchase is to calculate how many hours we would have to work to actually pay for the particular item we want to buy.
For example, if you want to buy a new pair of shoes or some other item then consider the cost by figuring out how many hours you would have to work to actually pay for it. In other words, is this purchase really worth making?
Here is how this concept works:
1. Your Wage
Think through some basic steps and you’ll see this is easy and quick to do. How much do you make an hour? Now, if you are on salary, you take your total income and divide it by 2,080 (that’s how many hours you work in a year if you are full time, 40 hour a week employee) in order to get your hourly wage.
2. The Price
Divide the price of whatever item you want to buy by the amount of the hourly wage you calculated. This will give you the number of hours you must work to make the purchase.
Then ask yourself, is it worth the number of hours required to buy the item you have your eyes on? We can be so quick to see something we want and buy it without much thought or consideration to the cost. However, when you think about how long you have to work in order to actually make the purchase, then you may think differently.
Check out this example:
Say you want a pair of new shoes that cost $80 and your hourly wage is $20 per hour. Do the math.
$80 shoes/$20 per hour=4 hours to work for the purchase
Is it worth the price? Maybe! You have to decide that though and this simple calculation helps you make that decision.
Try this tip and count the cost of your time as you spend money. Truly, it’s easy to spend and not even think about how much time and money goes into the purchase. Calculating and counting the cost ahead of time enables us to be wiser as we spend and even save money along the way.