If you struggle to stick to a budget, regularly spend more than you earn or often regret unnecessary purchases, changing the way you think about money could help.
One simple strategy is to stop viewing prices only in terms of money and start thinking about them in terms of the hours of your life you had to work to earn that money.
For example, imagine earning $50,000 a year while working 40 hours a week. If your monthly take-home pay after taxes is around $3,500, your hourly income works out to less than $22.
But that still does not represent the full picture.
Consider all the expenses associated with having your job, such as work clothes, transportation and lunches. You can also include less obvious costs that may be necessary because you work, including childcare, house cleaning or other services and activities.
Once these expenses are deducted from your income, your effective hourly earnings may be considerably lower than they initially appear.
This can change the way you look at purchases. Instead of asking whether something costs $100, for example, consider how many hours you actually had to work to earn that amount after accounting for your expenses.
Thinking about money in terms of your time can make unnecessary purchases feel much less appealing and help you distinguish between things you genuinely need and those you simply want in the moment.
Creating a realistic budget for essential expenses — and setting clear limits for discretionary spending — can also make it easier to stay in control of your finances.
Ultimately, every purchase costs more than money. It also represents a portion of the time you spent earning it.
