a way to spend less money

I started doing this a year ago and it's worked wonders for me.   I spend maybe half of what I used to and what I do spend money on I find much more satisfying.

The trick: think of how much something costs in terms of how many hours it would take to earn that much money.


I have a casual job. It's actually a good wage for the work.  Much better than I could get elsewhere and the work is enjoyable.  

But one day, I sat down and calculated for a 6-hour shift, it takes about 1.5 extra hours I am not being paid for to make my lunch, find some clean clothes that don't stink of a farm, travel to and from the work (on a good day) and other random things like finding matching socks (5 minutes minimum).  Then I wondered how much does it cost to get to work?  So I calculated the distance and the fuel efficiency and there was another expense.  Taxes.  the cost of the groceries for making lunch.  After all expenses, I realized I'm making roughly $10 an hour (which I'm happy with)

But that's only half the clever part.  

After I worked out how much per hour I have after expenses, I started thinking of things I want to buy in terms of hours.

For example, when I went to work, I would go to the local coffee shop and buy a pastry and fancy coffee.  This was $6 plus tax.  That's 45 minutes work to pay for that luxury.  Now I take a thermos of tea to work.  It takes less than 1 minute to prepare and 2 cents for the contents - total 'expense' 1 minute.  


It works for pensions too.  My pension is pretty sad, but it's the same every month.  I times that by 12, then divide it by 360 (assume 5 days holiday) and I have $x per day income.  I bought some shoes the other day, it was 7 days pension.  But I know these shoes last 5 years before they are too grubby to wear in town and will probably last another 10 years as farm shoes.  But still, thinking of it like that, it made me aware of the actual cost to me.

I love it R Ranson because I think in the same terms!

For me too, I write down everything that I spend so that I can see it, in these little nifty charts that Excel brings up. Holy crap, I spent $1,289 on restaurants last year...I got to stop that non-sense! If you can't see where your money is going, you cannot change your habits!

Having sheep, and knowing I get around $100 per sheep, I calculate what stuff costs me in terms of lambs. A hay rake I could buy, that is $3000, or 30 lambs. Do I really want to do all the work required to raise 30 lambs just for that? Probably not, but I can spend my time making something that is homemade and only costs me $100, or 1 lamb...yeah that is worth it.

Ever since I was young, I've done the same thing.  When I first started working it took me about 4 hours to earn $10 worth of spending money. I had lots of time, but not much money, so I learned how to do a lot of things myself (Plumbing, electrical, automotive repairs, etc.)
If I needed something simple (and later on complex) I would try to build it myself.

These day, I often find myself doing the opposite.  When I need/want something I think, "I could build that, but it would take me 3-4 hours and I can buy one for $10"  These days $10 is not worth 10 minutes of my time.

I take a different tack and get a good bit of motivation to save from....I think of the price of a favorite food or drink.  Crabs are an example...the large Dungeness crabs average around $8-$10 each in season here.  So when I'm contemplating a $100 purchase I automatically think  "would I rather have this, or ten crabs?" Or a hundred cans of sardines? Or 25 bottles of good beer?  Etc.

I do this with tools or material,but I compare it to something wasteful-fast food.
I might not fully realize the value of a piece of hardware or a speciality tool, but it will almost always be a better value than if I had spent that money on fast food.

It also affects what  I work for.
I invest in my house,yard,and tools. I invest in educating my children. I invest my time  into my friends and family.
I do not invest in saving money to leave to them, because money is so easily squandered.
My house ,tools, relationships and lands will be valued by my descendents more than money would
Turning the peach tree into dollar menu cheeseburgers is a lot harder than spending down a savings account,especially if the  fruit from  that tree fed you as a child .

I do this too but I also look at savings for example we eat organic bread . If we buy a loaf it's about 3/4/5 euro and we need  five a week that's about say twenty euro a week but it costs me about ten euro to make five loaves . So I look at this as about ten euros work for half an hour :-)
We are poor in money but we eat like kings and queens

David

Things changed a lot for me when I retired because before that I had so little control over my time.

One thing I noticed immediately was that my repair costs the first year after retirement shot up from $350 for the preceding years, to over $2200 in one year alone. After a little investigation I realized it was not a bad thing after all, nor wasteful spending. What had happened was, when I was working and something broke on my farm, having little time to fix it, I either:

1. Set that item in need of repair aside
2. Cobbled a quick fix together

But after I retired, I had time to fix things up properly, so while I was spending more money on repairs, I was also really going back in time and making up for the time I could not devote then. In the long run this is a win because even though I might have spent $2500 on repairs my first retired year, just one implement new would have cost me well over that.

My plan now is to rebuild one or two implements per year, and maybe fabricate some new ones.

I've been trying to think this way, too, and convince my husband of it. He has Crohn's, and so is on a special diet. So, either we make everything from scratch, or we resort to paying the crazy amount for things that are easy and fit in his diet. For a while, he was picking up LOTS of days of overtime, to pay medical bills, etc. But, since he was working all that overtime, he was eating a lot more expensive convenience foods because there wasn't time to cook every meal. And, I was stressed to the max with two kids, and never any relief because he was always working, so breakfasts and lunches were almost always convenience foods for me and the kids.

Then I looked at our Discover cards "Spend Analyzer." (We buy everything with the credit  card and pay it off in full every month, and get $10-30/month in cash back for doing so). Anyway, the spend analyzer shows you how much you spend on Groceries, Gas, etc in a spiffy little pie chart, with numbers. And, the months that my husband was working all that overtime, we were spending 1,300+ per month on groceries for the four of us! On the months that he wasn't working as much, we were spending more like $800. Part of that number is that, when we're stressed, we stress-buy more canned/dehydrated/shelf-stable food. So our house is full to the brim of non-perishable food stuffs, which really isn't the worst thing. But, the rest of the money is going to convenience foods.  

Every month, then, that my husband works 4 days extra, we end up spending about $400 extra on convenience foods. That's two days worth of his pay. He worked two days just to buy convenience foods! And so I said, "Would you rather be spending those two days here at home, playing with the kids, cooking food, working around the property...or drawing blood at the hospital and having us all more stressed?" This last month, he didn't pick up any extra shifts, and I've been able to cook more, my son is less stressed, we got a TON more done on the property, and my husband is able to spend more time on his fish, and everyone is more happy.  

I think it's really good to have a deep look not only on the time we spend on work-related stuff, and how much work you have to do to buy something, but also all the little expenditures that occur when we're stressed or have less time. How do we want to spend those hours--because there's only so many of them in a given day!