We all want to save money, but we have different ways to do so.
If you have been in the personal finance space for a while you most likely heard the whole “make your own coffee routine”, which is a useful tip but it may not work for you.
Now there are many, many ways to save money and here at Savebly I provide great simple ways to do so, but what may work for you might not work for someone else so keep that in mind.
Okay, where am I going here?
Well, the best money-saving tip starts with a mindset.
Let me explain.
Chances are you have a job or will have a job soon, so, in that case, your time = money.
As an employee, you are working a certain amount of time to receive a certain amount of money, simple as that.
Okay, so what does this mean?
This means that when buying something you want, think of it in terms of time instead of money.
How many hours do I have to work to afford this item?
Let’s look at a quick example:
Say you make $20 an hour and work the standard 8-hour day.
Now you go to the mall one day and see a pair of shoes you like and these shoes cost $150 (excluding tax).
Using this mindset and doing some quick math you figure out that you have to work 7.5 hours to afford these shoes!
That is basically a full work day!
This will make you think twice about buying these shoes.
Purchasing in hours instead of price is the best way to save money for future use!
Do you really want these shoes that much to spend a whole day working for them?
If it is yes, I would like to take this mindset two steps further:
What do you Really Earn?
This step is to calculate what you really make from your job after taxes and all job-related expenses.
This is termed your “real hourly wage” and it is from the wonderful book Your Money Or Your Life by Vicki Robins.
If you choose to implement this step in your money-saving mindset, which I highly recommend, then do these calculations as soon as possible before your shopping.
Let’s keep it simple here, take your commute time to work both ways and add that to your work day and then all the work-related expenses.
Now take your yearly pay (after taxes), deduct these expenses, and divide by the new number of hours you work in a day.
This is your “real hourly wage”. It gets more complicated than this but let’s keep it simple.
So now let’s take that previous example again:
You make $20/hr but after your calculations you find your real hourly wage to be about $13/hr.
Jeez! That is a big difference, now those $150 shoes are now costing you about 11 hours at work.
Decide if it is worth it now.
Okay… Okay… maybe you still want that item. What’s next?
Give It Time
After calculating what this item will cost you and you still want the product but you know you don’t need it, use the 30-day rule.
The 30-day rule is waiting until 30 days and still seeing if you want the item.
Chances are you will most likely forget about wanting that item and carry on with your life.
But if you still want it, then go ahead and get the item and be happy.
What good is saving money if you are miserable doing it?
Have fun in life but take some extra steps to minimize your spending as much as possible without sacrificing your happiness.
Thinking about money in terms of time is the best money-saving tip out there.
Where to cut costs is different for everybody but by implementing this money-saving mindset you will save money!
These tips will help you to save on almost anything!
- Think of the item cost in terms of time, how many hours do I have to work to buy this item?
- Take it one step further and calculate your real hourly wage.
- Use the 30-day rule to see if you still want that item.
Remember, saving doesn’t work if you are miserable doing it.
Consider getting the book Your Money Or Your Life by Vicki Robins for an in-depth look at calculating your real hourly wage and other great money tips!
Do not sacrifice your happiness for an extra buck, but do question if what you’re buying brings you happiness.
What is your favorite money-saving tip? Do you use this tip to save money?