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.
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 !!