Please help me welcome our newest staff writer, Sally Bohlinger. Sally comes to us as a recent graduate now trying to navigate the world of jobs and currently, the only permanent thing in her life is the ever-looming repayment start date for her student loans. She loves to read and do ethical case studies. Being an auntie is one of her favorite things in the world.
It took me a while to realize that I wasn’t being very smart with my money. I started working when I was 16 and quickly became addicted to having money – and spending it. I loved being able to purchase whatever I wanted, whenever I wanted it and only really hesitated on purchasing something if it was over a couple hundred dollars. Since I didn’t have a consistent bill every month, I never learned how to budget – and a savings account? Why would I ever need that?!
Looking back, I cringe when I think about what I spent all my money on. There were some necessities that I purchased – gas and lunch/snack food. I would say clothes are a necessity but only to an extent because I definitely bought more clothes than I actually needed. Accessories were my weakness along with giving gifts to people but the 50% tip I would leave whenever I ate out was definitely something that I should have put more thought in to (now I just hope that that extra money really helped that server!).
It didn’t really hit me until I was 21 and had just transferred to an out-of-state school that money wasn’t as easy for me to come by anymore. I was able to get a job working for the school, but it had limited earning potential and I was more interested in being involved on campus than making money. My buying-mantra of “anything and everything!” quickly came to a screeching halt, only in thanks to the low number in my bank account. But thank goodness for that low number! It definitely put me on a fast-track to being much more critical when it came to what I spent (and spend!) my money on.
I have never taken a personal finance class or had a “money talk” with my parents, so at first I simply stopped purchasing things because I wasn’t quite sure what to do. Obviously that plan wasn’t going to last forever and I needed to figure something else out – cue a late night in one of the cosmetology aisles at Walmart, where I was emotionally beating myself up about absolutely “needing” to purchase new mascara. That’s when my little light bulb went off. Hmmm, I thought, if I only buy the $5 dollar mascara, that means that I’ve worked under an hour for it…I’m okay with that…
So whenever I started to contemplate purchasing something, I would simply think of how many hours I would have to work in order to pay for it. Since I was making minimum wage at that time and most things I wanted to buy cost more than what I would make in an hour, it allowed me to start understanding the value of not only my time, but of a dollar too. It also made me more critical to the quality of what I was buying.
It’s a fairly basic technique I would think, but one that has really changed my life. Hopefully one day in the future I’ll be salaried, but even then, I’m still planning on using this mind-set to keep my spending under control.
Have you ever used this technique? What other easy tricks do you utilize in order to be more mindful of where your money is going?
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I look at my spending in terms of time lost, money that could be used to grow my net worth. By not having wasteful spending my wife and I are able to “buy” back three months annually of our time. The end goal being our investments providing a much greater income than our jobs.
Charles@gettingarichlife That’s a great way to look at one’s spending! When you and your wife are able to see that outcome, I bet it’s an awesome feeling and a great motivator to keep being mindful of where your money is going.
Welcome Sally! I do this all the time, especially now that we own our own business. If I know that I had to work X number of hours to buy something, I really start to look at if it’s really worth it to me. Often times, I just move on as it’s just not worth the money spent.
FrugalRules Thank you! I definitely move on from purchasing things all the time now because I’m able to identify that it’s not worth the money, but it did take me a while to learn that. Congrats on owning your own business! It’s easy to see how you would utilize this technique in conjuncture with it!
I’ve never really looked at it in those terms, though I can certainly see how it would be powerful. For me it’s always been more helpful to start from the standpoint of how much I want to be saving. From there I divvy up my spending between what’s left. But as long as I can hit my savings targets I’m happy.
Matt @ Mom and Dad Money It’s definitely been powerful for me and a good start to getting on the right track. I love how you start with what you want to be saving, I’m thinking I should probably try that too!
I definitely used to think about the time/cost of items, particularly when I was on a lower income. It helps to put all your spending into perspective.
Great article by the way!
Nell Casey Thank you so much! It’s crazy how much of my time and money I’ve wasted on purchasing items that I don’t really need or necessarily want but now I’m able to clearly understand and justify my spending. I’m sure it will shift a bit when I don’t have to be as frugal, but it definitely keeps me on track for now!
I ALWAYS use that technique. Most recently, I bought a new laptop, it took the entirety of my 4 week summer contract to pay off. Kind of depressing, but necessary, considering I conduct just about all my business all day every day on it.
brokeandbeau Glad to know I’m not the only one! Big purchases are always hard for me, but if it’s something that you will use every day and is necessary, that makes it a little easier in spending the money. I’m going to have to get a new laptop soon, so I’ll be sharing your pain in seeing all of that money gone so quickly!
I still use that technique! =)
It doesn’t work as well now that I’m self-employed but I still try to relate purchases to the work I’ve done. I used to waste so much money….it’s depressing to think about it! =/
Holly at ClubThrifty It is really depressing to think about, I agree! My student loan debt is huge and I always have to stop myself from thinking about how much smaller it would be if I had used this technique when I first started working. I love hearing that you still use it! I’m pretty sure I’m going to use it to some degree for the rest of my life!
I need to use this technique more often. I think it would really help me to reign my spending in.
SingleMomIncome I love it! It’s made a huge difference in my life and I’ve noticed that since I started, it’s become so much easier to walk away from purchasing something I don’t really need…I was definitely addicted to spending my money! Hope it can help you too!
I like this idea! It sounds like a great way to look at spending. I work part-time at Target on top of my full-time job and what I make in an hour at Target is close to what I spend eating out at lunch…I may have to think about that next time I don’t feel like packing a lunch!
HeatherShue It’s a great motivator! I do allow myself to splurge every once in a while but typically even when I know I can spend the money, it’s hard for me to do it now, haha!
I always think about how many hours that I need to work to buy something. It almost always deters me!
SenseofCents Awesome! It really deters me too, especially now because I’m on a fixed income. Before, I would sometimes justify a purchase because I was picking up an extra shift and the money I made from it would cover that item….which is good for an emergency or something, but not because you absolutely need that new Coach purse, haha!
Yes this is a very popular technique that I first read about in Your Money or Your Life. How much of your life energy are you putting into a purchase. When you think of it that way, you stat to think a little differently.
Beachbudget It’s definitely made me think about my spending differently! I didn’t realize it was so popular, but that’s great to hear – I would think that pretty much anyone could use it, no matter their income!
I think that’s a great way to look at purchases. Often we get blinded by the instant gratification of new things, especially when they go on the credit card. If new jeans cost a day of my life, are they really worth it? Probably not.
Eyesonthedollar Thank you, it’s worked amazingly well for me so far! I can tell you that I now get instant AND long-term gratification from walking away from something that I really don’t need to purchase. And if I were to spend a day of my life working just to buy new jeans (which I hope I never do), they would be treated so much better than they would have been in the past!
I remember those days. Nothing good about them. I think you are taking the right path. I did much of the same as you and it has worked for me.
DebtRoundUp Great to hear that you’ve had success! It’s been working for me so far and I definitely feel that I’m on my way to being more financially savvy!
I’ve definitely used that technique before, but it only works for the optional purchases. If you break out how many hours you’re working just to have a roof to sleep under and food to eat, you’ll not like it. There is always some turning point where people realize how important money is. It’s just some people have that moment earlier in life than others.
Ca$hFunny I can definitely see how it wouldn’t work in those cases; I’m fortunate to not be paying expenses like that currently but am hopeful that even when I am paying for those things, this technique will still be helpful when going to spend my “fun money” :)
I think this is a good strategy to use. I haven’t really framed purchases like this, but that is mostly because I know what I place value on, and I know what I want to pay for certain items (I’ll usually choose the least expensive option). It helps to do research when buying something a bit more expensive to make sure it’s worth the money.
JourneytoSaving This strategy has helped me get to the point that I’m able to see much clearer what I do value spending my money on and has pushed me to really compare products to make sure I’m getting the best bang for my buck! That’s awesome that you already have that mindset when it comes to spending because it definitely took me a while to get there. And I’ve started to really research something before I purchase it, reviews are my friends!
I have not thought of purchases in that light. I typically will ask myself on optional purchases, “will this make me any happier in 24 hours? in 2 days? in 30 days?” When I answer honestly, I typically end up not buying.
Also, welcome Sally, I look forward to your contributions here!
KyleJames1 Thank you so much! I’m very excited to be here!
I love that strategy as well; I’ve found that if I’m comfortable with the price of something, then I’ll switch to that mindset to really figure out if I need it….and typically I also end up not buying it :)
I tend to quantify things in terms of whatever the last major purchase was, such as “the difference between those houses is two cars.” Or, “we could buy three more paintings.”
Ugifter That’s a great way to look at your monetary value! I love seeing everyone’s ways of staying mindful of where their money is going :)
I should try to use this kind of technique, thanks for this great post Sally! From now on I will think twice before buying things.
Clarisse @ Make Money Your Way Thank you for taking the time to read it and comment! Good luck with the technique, it’s been amazingly helpful for me!
I still use that technique. :)
ayoungpro Awesome! Love hearing from people that use it and have success with it!
I’ve always heard about this technique, but personally have never used it. To each their own!
LisaVsTheLoans There are so many different strategies out there! Definitely a good thing when you’re trying to figure out what works best for you :)
Wow, 50% tips, I’d have loved to be your server when I was in high school! I’m sure you made a lot of servers’ days!
Money Life and More Haha, I sure hope so!
I have definitely used that method a couple times to determine whether to make purchase. It really helps drive home how much that item really costs you.
MicrosMissions It does, so much! It also helps me realize just how important that item is and if it’s worth the value.
Welcome Sally! I totally cringe when I think about the money I spent in HS and College on crap I totally didn’t need (expensive makeup, purses etc.) These days I try to wait at least a few days before making a big or expensive purchase. Usually after a couple of days the excitement wears off and I can decided if I really need or want the item. It definitely saves me a lot of money and headache.
StudentDebtSurvivor Thank you!
Isn’t it scary to think about that?! Here’s to hoping those days are behind us, haha! I love your technique and I’ve found that I’m able to utilize it so much better than when I tried doing it before I learned the value of my time and money ;)
I am so excited you are writing for Young Adult Money Sally! I am looking forward to reading your posts each and every week! :)
vmcarlson7 Victoria! Thank you! I’m so excited to be here :)
I have never thought about it that way. But I guess it is a good technique to use because it will make you think twice before buying expensive stuff.
BorrowedCents Definitely! It’s really helped me stop and realize just how much money I’m actually spending on something that I don’t particularly care about or need.
I really need to use this technique more! It’s so easy to get carried away with “sales” that we forget how much money we’re spending in the first place. I do try to use the “cost per use” analysis too. I don’t care if it’s a great leather jacket I find at a thrift store for $30… if I only wear it once it’s an expensive coat!
Tara Zee It IS really easy…I used to justify buying something just because it was “on sale” which, looking back, was not a good excuse, haha. And now I definitely will not purchase something if I can’t think of multiple ways I would use or wear it!
Wow, those servers must have been HAPPY! I don’t usually think about purchases in terms of how many hours I have to work for them (mainly because I am a freelancer and my pay rates vary). But it’s definitely a good technique for those able to accurately measure their hourly rates :).
Erin My Alternate Life I hope so, haha! It is really easy to use this method when you know exactly what you make per hour every time, but to freelance or serve and have it vary all the time? Much more difficult to figure out!
I use that technique too, being super lazy really helps keep the cash in my wallet.
RFIndependence Hahaha! I think I just found another technique to try! :)
That’s a great strategy. For me, I would weigh the purchase against my long-term goals. Where do I want to be and does buying this get me closer to it, or push me further away. It wasn’t perfect, as sometimes I needed something that pushed me further away, but for the most part, it helped me control my spending.
MoneySma1 Thank you! It’s really helped me get on the right track. Your strategy is great and something I’ll have to try :)