# How many hours did you work to buy that?

A few weeks ago, I blogged about considering the cost-per-use for items that you buy. As most of you know, with the cost-per-use concept, you take the purchase price of an item, and divide it by how many times you think you will use it. For example, when I buy a pair of black flats for work, I will likely wear them 3 times per week, for 2 years. So (52 weeks) x (2 years) x (3 wears per week) = 312 times before I buy a new pair. If my shoes cost me \$75, that’s about \$0.24 per use.

Another way to help you determine whether something is worth buying or not, is to figure out how many hours you will have to work to purchase that item. It can be a serious eye opener. I used this approach a lot when I was a teenager making \$8 an hour. When I realized I would have to work two full days in order to pay for a university application fee, I asked for my hours to be increased. And when I broke a heel on a pair of boots, I calculated that it would cost me 12.5 hours of work just to replace them – so I spent the equivalent of one hour of work getting them repaired instead.

Today, I use the same method when I’m thinking about buying a big-ticket item. For example, in 2011 I worked approximately 60 hours each week (60 hours x 52 weeks = 3,120 hours total). I earned around \$80,000, which means my hourly salary (before tax and deductions) was \$25.64. After tax, my true hourly wage was around \$18. So when it came time to making the decision to get adult braces, the \$6,980 price tag meant that I would have to work 387 hours just to pay for them – or nearly 6.5 weeks. Yikes.

I go out for lunch with co-workers almost every Friday. This costs me around \$10. After taxes, my true hourly wage is around \$23. Which means I have to work less than 30 minutes to pay for that meal. To me, it’s worth it.

My mortgage is \$1,070 per month, which ends up being about 46.5 hours – or less than 1 week of work for me, after taxes. That’s also worth it.

Then there was a gorgeous dress I saw online at Anthropologie, but it was \$300. And as much as I loved it, I couldn’t justify the 13 hours of work it would cost to pay for a dress.

You get the idea. Obviously this method, much like the cost-per-use method, has its pros and cons. But I really do find it helpful to break down how many hours I have to work for something to see if it’s worth it.

So the next time you have a few minutes, take into consideration your wants vs. needs. How much of what you are spending on a regular basis is on needs – like groceries, rent, insurance, and utilities? And how many hours are you actually working each week just to pay for the stuff that you want?

Asking yourself these questions is important, and taking the time to calculate how many hours you have to work to afford something is a really great exercise in the value of a dollar. A dinner out with friends every week might not seem like a big splurge, but if you’re making minimum wage, or you can’t pay your bills, or you are drowning in debt, or you’re working overtime just to make ends meet (so that you can continue buying stuff), maybe it’s a good time to evaluate what you can truly afford.

Is the lifestyle you’ve built for yourself worth the hours you put in?

### Do you think it’s a valid method to evaluating purchases?

I'm a writer, personal finance blogger, and marketing professional based in Vancouver. I'm a former Toronto Star (Moneyville) columnist, author of The Beginner's Guide to Saving and Investing, and co-founder of the Canadian Personal Finance Conference. When I'm not working, you can usually find me running, playing field hockey, or plotting my next adventure.

1. Great post Krystal!

“The price of anything is the amount of life you exchange for it.” -Henry David Thoreau

2. I almost always do this. My dad taught me to manage my money, so I’ve always tried to question the true value of things to me. I give in to the occasional impulse purchase, but because I am careful overall I never feel too bad about it! When I was younger, this method really helped me avoid questionable purchases. Now it’s just kind of an automatic program in my head.

3. I use this method pretty often, I find it very insightful.

On another note, this wallet is very cute! Where does it come from? How many hours does it cost? :)

4. I learned this lesson about 20+ years ago when I was a teen. I don’t know why but for some reason my father was cleaning our powder room toilet one day after work. Unhappy with the situation he remarked “I get paid \$250 per hour, I shouldn’t be scrubbing f*ckng toilets”. That has stuck with me ever since. He did retire at 50, now lives in Central America, has twice daily house keeper and resident gardener/maintenance man so I guess it was worth it.

5. I almost always do this whenever I buy anything. Is it really worth it to buy this dress if I had to work 3 hours for it!?

6. I don’t usually think about it like this unless it’s a special occasion item or a high price tag item. Usually I end up skipping it if I’m not going to get regular use out of them. Great post~

7. I LOVE this way of thinking about money… actually it might be the only budget trick that works on me.

This came at a good time, because I’ve been thinking I need to curb my dining out. I spend anywhere from \$25-\$50 on a meal out, so it’s absurd to think I’m working 1-2 hours every day just to eat ONE meal that day =( That’s gotta stop!

8. I have always been hourly at my jobs and this is something I have thought about ever since I started my first job when I was 15.

9. don’t forget about the opportunity cost of investing and getting free money for life!

10. I do this all the time! It’s how I try to curb my spending.

11. I typically do this for gifts and bigger ticket items. I rarely purchase a gift that would cost me more than a day’s work. Plus, it’s easier to spend a large (to me) amount of money knowing that it only costs me a day or two of work.

12. This is a great way to go about making a purchase. A bit depressing when I think of how much I work just to pay rent, but great nonetheless.

13. I do this when I have a job and can picture it. When I’m unemployed, I usually end up telling myself “don’t buy anything you don’t absolutely need till you get a job” but have a hard time resisting coffee because I just can’t associate it with how much work it takes for me to pay for it.

I used to buy a cookie every day as a treat for getting through the day. I did the math and it cost me around five minutes. Totally worth it.

I don’t like malls (my friend thinks this is strange for a girl; however I think malls are depressing windowless places yelling at you to buy things. Malls don’t align with any of my values, and the experience doesn’t really belong in my life). Malls wear down on my willpower until I finally cave and buy a dress that cost me way more hours than it should have.

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