Something I often consider is the amount of hours I need to work to pay for something – that helps me to put the purchase into perspective. I recommend that everyone know their net hourly income. Simply divide your net income on your paycheck by the number of hours worked in the pay period. For example, if $2,000 was deposited into your bank account and you worked 80 hours in the pay period, your net hourly income is $25/hour. Now any time you want to purchase something, divide the cost of the item by your net hourly income to determine the number of hours you need to work to pay for the item. It might make you reconsider the purchase. As an example, the one-week holiday you want to take to Cancun will cost $3,000, which means that you will need to work 120 hours (3 full weeks) just to pay one week away.

You may use this same logic to reconsider your daily costs. For example, if you pay $15 per day to park at your workplace and your commute is 20km each way with an automobile operating cost of $0.40/km, then you are spending $31 per day to drive to work and park there. With a net hourly income of $25, the first 75 minutes you spend working each day is only covering your cost to get to work and park – that’s over 6 hours per week working just to pay for getting to work! If you ask most people, they would be oblivious to this and not understand how much of their workday is being spent to simply cover their costs to get to work! By being aware of this concept and your net hourly income, you will be more conscious of your spending. Always ask yourself – how many hours do I need to work to pay for this?