I hear the phrase “Cost him/her two weeks pay” a lot when people are talking about someone buying something expensive. The implication is that the item bought was not only expensive in itself but also something that the person purchasing it really had to work to pay for (or perhaps the person is now in some pretty good debt).
I’ve never really thought about what that means in terms of my paycheck and my spending though. I wonder if that sort of thought process would change how I spend. Probably not in terms of small things, but perhaps in terms of big things. I’m looking at a new computer and if I think about it along the terms of “That would cost me X days of take-home pay,” maybe I will be more choosey about which computer I buy. Or at the very least, take better care of it.
Of course, if I’m making a big purchase like that, it’s something I will think about and will take care of. So maybe I should be thinking smaller scale. One day’s worth of take-home pay. Four hours of work. One hour of work. “I sufferered through that three hour meeting yesterday to earn the money to buy this. Is this really worth all the suffering I put in to earning it, or should I spend that money elsewhere?”
I’m not sure that this way of thinking will change how I spend, but if you struggle with spending, it might be an interesting experiment and might help you keep a bit more money in your pocket every week.
Megan is a 30-something government employee in the Washington, DC area. She got interested in Personal Finance when she got out of college and realized that her paycheck wasn’t going to go as far as she had hoped. Since starting this blog, she has managed to buy a house and make a solid start on her retirement goals, and hopes to help others do the same. Here is her story:
In 2007, I was a gainfully employed 20-something with no debt but not a lot of knowledge about personal finance. It was a co-worker’s comment about Roth IRAs that sent me to the internet, searching for information. It was then that I realized that I really didn’t know a whole lot about personal finance and that my current financial situation was due a lot to inherent frugal tendencies, generous family members, a fear of debt, and good luck. While that was working for me, clearly I needed a better plan.
While I had no debt, I was also pretty much living paycheck to paycheck and not worrying about going over budget (I say this as if I had a real budget) because I had an emergency fund set aside to cover any overages.
Except that’s not what an emergency fund is for.
So I did a lot of research, read a lot of blogs, and decided that I needed a plan. I needed to budget. I needed to know what I was spending my money on. I needed to prepare for the future.
I decided to create a blog not only to make myself accountable to others but also to share the knowledge that I gained along the way. I’ve learned so much from my fellow bloggers, and I hope that my readers can find something useful in what I have to share as well.