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.
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 .