We don’t buy things with money, we buy them with hours from our life.
Or, as Henry David Thoreau put it, “The price of anything is the amount of life you exchange for it.”
This is a life-changing principle. When we begin to see our purchases through the lens of exchanging life, rather than dollar bills, we can better appreciate the weight of our purchases and understand their full cost.
For that reason, I thought it might be helpful to take a hard look at how much life some of our purchases actually cost us.
For the sake of conversation, let’s use the median US household income. In 2017, that number was $61,400. For simplicity sake, let’s round down to $60,000 annual income.
If your household income is $60,000, working a typical 40-hour workweek, here is how many hours of work are needed for the following purchases:
Grande Starbucks Cappuccino ($4.00) = 8 minutes of work
Pair of Wrangler Jeans ($24.99) = 50 minutes of work
Coach Brand Purse ($119.99) = 1/2 day of work
55″ FlatScreen TV ($711.00) = 3 days of work
256GB iPhone XS ($1,249) = 1 week + 2 hours of work
Dinner at a restaurant for your family of four ($80.00) = 1/3 day of work
Dinner at home for your family of four ($17.00) = 1/2 hour of work
New Living Room Furniture Set ($1,983.94) = 1 week + 3.5 days of work
2019 Ford Fusion SE Hybrid ($26,550) = 5 months + 10 days of work
2,500 square foot house (10% down payment, 30-year mortgage of monthly payments, $303,000 purchase price) = 11 years + 6 months of work
1,600 square foot house (15% down payment, 30-year mortgage of monthly payments, $196,000 purchase price) = 7 years + 2 months
Keep in mind, the amount of work needed for the items above is based on an annual salary of $60,000. If your annual salary is $30,000, the work time will be doubled. If you make $120,000/year, the measurements should be halved.
Of course, there are alternatives to exchanging our hours and lives for material possessions…
It takes just 10 minutes to tell your child a bedtime story.
45 minutes for an evening walk with your spouse.
60 minutes to help your son/daughter with homework.
Or 2 hours/month to volunteer at your local soup kitchen.
The money we earn is ours to keep and we can spend it as we wish. But it can be a helpful exercise to realize how many hours of our lives go into each purchase we make.
And it is always wise to remember we can spend our hours pursuing items of far greater value than material possessions.
This is an excellent reminder on where to put our time. Thank you
Amazing. Really made me think. Thanks
We embrace this philosophy as well. Here’s the trouble, though. When it comes to minimalism, which we do follow to a large extent, the idea of paying for something with the hours of your life versus getting rid of something that still has potential practical value becomes difficult.
I could pare down eight more t-shirts from my wardrobe. Or I could hang on to them because I have room to store them and it tales none of my time or money to keep them on the shelf. Or I follow a more minimalistic approach and get rid of them. If any of my 7 remaining t-shirts becomes unrepairable then I have to go to a store and spend my time and money on a replacement. Here is where the philosophy of what goods are worth in terms of time and money trumps a desire to go more bare bones minimalistic.
There is something wonderful about having an exact odd and end or extra pair of boots or backup tools that you can just dig out on the spot when your first one breaks. Saves a lot of the time and money that you described in this article.
I’m curious if this phenomenon is also a named approach. “Preservation of what’s on hand because it often comes in handy and saves hours of life from running around procuring a replacement down the road.” That doesn’t have quite the same ring. Anyway I’m curious what a good guiding principle is when these two philosophies of minimalism and hours of life collide.
KP – my two cents . I generally follow a one comes- in one goes- out approach. Like when I get a new pair of shoes, the old one goes out ( either to a proper landfill or recycled for deserving users), same for clothes to a greater extent ( I prefer white and hence the turnover is higher – in a tropical climate). It also helps that there is a great charity / recycling industry alive in India hence you really dont throw anything away. Coming to the other point : I have stopped just in case items which cost above Rs. 1000 /- ( above 15 USD), prefer to wait for a week and buy only if required. Like in the case of headphone last week – gave away my old one and tried for a week – only when i felt the need, went for the new one…
Regarding hours of life, after I took an online purchase detox for 50 days, now all I do is add stuff onto my cart when I think I need it,( and when I am free) and purchase only when I need it !
Hey Kp. I share your dilemma of not knowing what is practical to hang onto for future use vs freeing embrace of minimalist decluttering. Be honest with yourself as to what can be truly useful and what detracts from your life by being clutter. I believe when you get to this point you’ve already given it good thought and it becomes personal choice. The thing is we really don’t need many “extras” for future use of anything. By all means though if you have room to keep and store a few extra t-shirts you already own and it makes you feel good. Keep them.
KP, I can relate. I feel like, if it’s an item that you have a good chance (be honest!) of using in the future (like a t-shirt that fits and you actually like), then keep it for now. When another t-shirt wears out, you’ll have that one to take its place (or even keep them all out and ready to wear to begin with).
As long as you’re not buying more t-shirts in the meantime (*this* is the key!), it makes sense; you’ll eventually get to just the right amount of shirts without wasting money replacing one you could have kept. You’re still becoming minimalist (ha!), just on a slightly longer timeline.
I’ve read it somewhere and it made sense to me…if you can find it in less than 10 minutes for less than 10$, then give it away! I used to store all these “just in case” junk and…surprise, surprise there was NEVER a case :)
Great Article. Material possessions cost a lot more than money. Time is the one thing that is so precious. I really try to use it wisely.
I am self employed…. Just sold a 6000 sq. ft. home FULL of stuff amassed over 25 years. Moved into a rental with 2500 sq.ft. Got rid of so much it boggles my mind. Between building the house and moving to it and living on 2 1/2 acres. Having my business there… Raising 2 well adjusted sons there, over the years inheriting two households of art, antiques, furniture etc… I think now of cost of the time it took to live the life. I miss the memories created there, my garden, big property. But now I realise all I did was take care of stuff. And it is just stuff and you can’t take it with you. I’ll be 60 in May and feel like a weight has been lifted off of me that was so heavy, that I can’t put it into words. Joshua I want to thank you for giving me perspective throughout it. I bought your book about a year ago and started following your feed , prior to the move. Without your kind words and direction. I don’t think I would be where I am now. Thank You! I just regret not reading it sooner. Why are we all “buying” into the fact that it is stuff that makes you happy? I now know the reality of it. Thanks for helping me and so many others.
Messy garage OR Play with your kids? I choose play with the kids! Regards, Cindy
I love this. I am in the process of reducing the “stuff” that we have accumulated over the past 25 years as well. Not downsizing our home but definitely downsizing our possessions. I tend to look, like you, at what the upkeep of these possessions is costing me – the time to maintain them, clean around them when cleaning my house, and how much, if any, enjoyment I get from them.
Good post! I will try this as well. I currently use another approach by calculating the monthly cost of an item to decide if it is worth buying for me.
E.g. iPhone for 800$ used for 4 years results in ~17$/month.
Car for 25000$ used for 10 years results in 210$/month.
For sure you can think about more factors like expected usage, maintenance (cost or your leisure time)…
I love the way you compared hours spent working for the price of things v hours spent on experience. It’s a mindset I’ve used a lot lately. But holy moly the price of things in America are so much less than in Australia. Our dollar is worth less…but our average income is the same and the things you mention are much more expensive. So the percentage of lives spent to buy things is extraordinary by comparison. Yet I would say Australians have a similar relationship with stuff. Eye opening!
I remember my cousin hosting a party and his mother wondering aloud how he could raise three children in such a small house. He reminded her she raised six children in precisely the same floor plan. Why do we think we need so much more now?
It’s not just hours of work; it is hours of your life. Do you really want to spend 11 years and 6 months of your life paying for the larger house?
Excellent article. Everybody who has to work a job or lives on fixed income should think of expenditures in these terms. Some time ago I (pretty much) stopped making any unnecessary purchases. I learned spending less money equals more freedom and better quality living. Minimalism is revolutionary and best societal antidote to unbridled capitalism.
Why just those on fixed incomes/with jobs? I think the opposite actually. It was only when i went part time at my job and later became self employed the hourly rate came into my decision making, e.g. I”m working 70% so earning 30% less which is equivalent to X and Y.
When i had a full time job it wasn’t like i could just decide to work less hours and buy less. still had to work the same hours even if i cut my spending.
I love this post. I’ve consciously cut back my working hours in the last few years- I think that the best work/life balance comes from me working 4-5 hours a day, so that I still have time to cook, exercise, read, spend time with loved ones etc. I spend less than I used to and savour the little things each day.
This is a super helpful approach in getting back in the green financially. About seven years ago, I was in the red almost every month. There were a number of reasons why, including having two small children but also student loans, car payments, new house, unexpected medical bills, etc.
Then, I made some radical changes in my philosophy on spending; and one of those radical changes just so happened to be what you wrote about today. I began looking at all of my expenses as not an exchange in money, but an exchange in my time and the hours I spent working to make said money.
Almost immediately, my monthly expenses began to decline and I went into green for the first time in as long as I could remember financially. I began using financial tools to help track my progress, did the snowball method on credit card debt, paid off my student loans and car, swapped out somewhat costly expenses for free community activities and hobbies.
I would suggest others reading your post to take your advice. Not only does it help, but it is also the reality.
As the saying goes, “Time is money.”
Somewhere along the line, we stopped thinking of it that way.
Your Money Or Your Life changed one of my co-worker’s lives. He bought a copy and gave it to me. It changed my life. When I mentioned it to a niece years later, she wanted to know where she could get it. I gave it to her, with all my “mark-ups.” When another niece needed major assistance during a time of great hardship in her life, I used the principles once again to help her set up a manageable lifestyle, simply following my own workpapers and substituting her information and other specifics. Today she is “seeing the light,” and it’s not a train.
I wish to correct one inaccurate statement … “Keep in mind, the amount of work needed for the items above is based on an annual salary of $60,000. If your annual salary is $30,000, the work time will be doubled. If you make $120,000/year, the measurements should be halved.”
The more you make, the higher tax you pay. As an example, if one is at a 50% tax rate, one must make twice the amount of money to pay for something compared to someone not paying tax. In your example, the 120K earner would spend less time than the 60K but not half.
Thanks Joe. I did not remove taxes from the gross income figures to form my calculations. So technically, my numbers hold true.
Not really, as the tax burden increases with increased income… you have to pay not only for the item but also pay the increased taxes … if there were a flat tax, your numbers would hold. With progressive tax rates they do not. Those that make more are penalized in having to earn more for any particular good or service purchased (unless done with pre-tax income)
These numbers are calculated with pre-tax income.
I did this for years. I worked at a $12 per hour job supporting my family (my husband is disabled). I always took just a minute to think of how long I had to work for something I wanted. Breaking down purchases by the amount of hours it would cost me made me realize I didn’t need most items. I paid our bills, bought food, necessary items and nothing else. I paid off our home, car & now am retired. We have learned to be happy & enjoy life with very little.
Being self employed, I do think of money this way. It is actually a great concept to teach to children who have an allowance or little job. It helps them think beyond the impulse spend.
Thanks Joshua ,
your article is fantastic, a new way of thinking money. I wish everyone in France (and everywhere) could read it and start changing their mentalities and lives. We need it so much for the planet !!
Great article. I would add that we should also figure out how many hours per day/week/month it will take to keep the item clean and functional. That’s what also detracts from using our hours doing what we love with those we love!
Now that I’m retired, I need to look at purchases not in terms of how many hours I’ll have to work, but how much of my retirement money I’ll be spending (wasting?).
“Your Money or Your Life” by Joe Domingues and Vicki Robin is a classic that illustrated this c1992 — has since been revised and reprinted. Excellent introduction of the concept of converting your purchases into hours. Everyone should read it and think about what they are buying with their hours. Many books are being written but this is the “true classic”…..
This idea was a key component of the book “Your Money or Your Life,” written by Joe Dominguez and Vicki Robin – a book I highly recommend for everyone regardless of your stage in life. Following the principles in this book (along with the timely gentrification of our neighborhood!) enabled us to retire in our mid-50s to a rural, relatively inexpensive area where these same principles have helped us lead an “outwardly simple, inwardly abundant” life on a modest income. I would also say that these calculations would be best done with after-tax income. Things become significantly more expensive time-wise when calculated according to what you actually get to keep out of what you earn. Thanks for this article!
Excellent article on thinking differently about our money.
I shared it to both my Facebook group and Business page. Great work. Love your stuff.
Really interesting article – I wasn’t sure whether income tax was taken into account in the calculations – as these purchases are made from net income after tax – which may mean having to work even longer.
I agree with the perspective – enjoy as much of life as possible. And for me that has been about creating work where I get to spend time with people I really enjoy working with or talking to every single day. That’s rarely possible when you’re employed by someone else. But when you work for yourself it is possible. if you enjoy you’re working day a lot and it;s fulfilling – you don’t need to earn so much money to reward yourself for the boredom/stress/frustration of your work.
Thanks for the comment Helen. I did not use net income to form the calculations above, but based them on gross income. I can see why one might argue for using the former (net income), but I would disagree. The percentage of my income paid to the country I live in for the purpose of governance of society is not lost income in my book—it’s just the portion that I pay for roads and laws and national defense.
It may not be lost income but it’s still not part of your income you have to use on whatever it is you are calculating on buying so net income will still make sense.
Either way it’s a great way to think about money.
I agree in part with this comment (“work” doesn’t always have to feel like “work” when you are surrounded by good people and doing something you love) but I totally disagree with the part that it can “rarely” be found. I work for a large corporation, have excellent counterparts and management, and feel fulfilled most days (if not almost every single day) on the job. I feel a sense of purpose. It can be done. It took me 13 years to find this job but I’m so glad I did. If you feel like you’re slogging along in your job, the oweness is on you to find something (or at least an environment) that makes you happy – and this can certainly be found somewhere where you’re not the boss of your paycheck.
I’d also like to add that the article (great perspective, btw) doesn’t even factor in the time of keeping up or managing that stuff once you have paid your dues to acquire it! So really the cost is even more…costly.
Raising even one child is a great expense too, ( close to a quarter mill. dollars) we both worked and retired and chose to be child free as blue collar workers. Friends only had one or none also. Some older couples have to keep working to pay down college debt for their kids who unlike my generation, kids no longer work their way thru college.
Think of the real cost if you have a job which you don’t like and make a non essential purchase. A $5.00 latte
before work x 5 working days with a $20.00 per hour job 40 hrs weekly . Like working for free I hr 15 min. and hating it.
Decades ago, I heard someone say to figure out what your real wage is using after-tax income along with your commuting time and costs. You break it down to the hour and then use that for every purchase from small to large. I make it simpler and ask myself if I have any business buying item X, and then I ask if I’ll still want it six months from now given my own history. I’ve already dropped most full-service restaurants (for a whole host of reasons), and I’m clearing out tempting email offers by unsubscribing. It’s a start.
I have always thought of money in this manner. It also connects well with what I have come to pesonally call ,”Value living”. In other words ,how valuable is this service or item relative to the time it takes me to earn the money to exchange for the service or item.
Creating a passive income circumvents this principle. You only have to exchange your time once and then let the money earn money for you freeing up your time. This is why I feel you are not free or truly rich unless you create wealth without labor or very little labor. One must have a balance between being time rich and money rich.
This is so true. We forget to think about our time this way!
Great piece and something to think about no matter how much a person makes. Quality time with family, friends and even ourselves is always the best investment, in fact priceless.
I would love to be able to maximize my hours with my family and minimize the mind numbing job hours but even when you live minimally (as I do), the mortgage company still wants their monthly payment. Frustrated in NJ.
Part of the cost of living is the expense our governments impose or pursue as a third party. I live outside Atlanta, and virtually every new subdivision is $250K and up. Attached homes start at $170K. My county says it’s only “80% developed,” and they’re going for 100% for the taxes while whining about school expenditures, new roads…etc. It seems cheap by NJ costs, but for this area, the costs have soared because of the county government.
It looks like your calculations are not considering taxes, but all of these can only be purchased with after tax money so they are far more expensive in terms of hours required. Also, this is only considering literally 40 hours and not the commute time x10 per week, typically a mandatory 1 hour lunch break x5, plus unpaid extra hours which are extremely common. Financial independence for the win – spend as little as possible to be truly free. :-)
Vote the people out. The taxes never go where they say.
$250K up ? You Americans are so lucky ! I live in a small village of 2500 people near Byron Bay Australia and the entry price for a 3 bedroom house is around $850K . That is BEFORE stamp duty on the purchase & legal fees .