15 January 2010

Tip of the Day 15 January 2010

Calculate the Real Value of Spending

A good way to curb spending is to calculate how long you have to work to earn enough
money to pay for each purchase! For example, a takeaway meal may be nice, but is it worth the extra time you have to work to pay for it? The average takeaway chicken dinner for four means you would have to work three hours to enjoy one meal that is gone in just 30 minutes!

Instead of looking at the dollar value of an item,  look at the ‘work value’ of an item - this is what it will really cost you. To do this, work out your net hourly rate (after tax and minus expenses such as babysitting). When you are tempted to buy something, divide the purchase price by your nett hourly rate to see how long you will have to work. It can be a real turn off - especially when buying takeaway food!

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