Over the years, I’ve talked to a lot of people about their personal finances. Some folks are to-the-penny budgeting fans. Some are seat-of-their-pants spenders. But one thing they all have in common? They struggle with impulse buying.
And with good reason. Companies — and their highly effective advertising teams — spend billions of dollars every year figuring out the best way to get us to buy things. They’ve literally gotten it down to a science.
But all the advertising in the world can’t stand up to the cold light of reality, when correctly applied. One of my favorite ways to shine a little reality onto a potential impulse buy? Putting a price on it — but not in dollars.
Changing your perspective
Sometimes, a difficult problem is best solved by changing how you approach it. A shift in perspective can show you a solution that you never could have seen from your previous position.
That’s what this method does. It changes the way you perceive the cost of things.
By default, we tend to think of purchases in terms of the price on the tag. A meal out costs $40. A new jacket costs $100.
But the money you hand over for an item isn’t the real cost of the item. That’s because most of us have to work for that money. So the real cost of the item isn’t the number on the price tag; it’s the number of hours you had to work to afford it.
The real cost vs. the monetary price
When you make an effort to think about the money you earn as a result of the hours you had to work, your entire view on the value of those dollars can change. Now you’re not just looking at things in terms of the money in your wallet; you’re considering the time spent away from family, friends, and hobbies.
For example, if you make $10 an hour, every $5 impulse purchase actually costs half an hour of your time. (Well, more, since you’re losing money to taxes, too.) That $60 video game? That’s a minimum of six hours of work. That’s six hours of your life you’ll never get back.
Here’s another way to look at it: Would you spend an extra six hours at work in exchange for the video game? If the answer is no, then perhaps you shouldn’t buy it with cash, either.
And the concept scales with your income. Want to splurge on a new big-screen TV? Even if you make $50 an hour, a $2,000 TV will still cost you at least a week’s worth of work. Are a few extra pixels worth a week of your life?
Next time you’re about to hit the checkout button, work out how many hours of work you’ll need to put in to cover the total purchase price. Then picture your boss handing you the items in your cart instead of a paycheck. If you wouldn’t be happy with the substitution, close the window and move on.
Time is finite; use it wisely
Your time is the most valuable resource you have. And it is finite. We don’t know how much we have, but we do know it doesn’t go on forever.
We have to use some of that time to earn the money we need for, you know, life. But the time we spend at work we don’t get back. So why waste your money — and, thus, your precious time — on purchases that aren’t worth it?
