Purchasing with your real hourly wage

Dave wrote a post the other day that made me think deeply about. The article, titled “Knowing your real hourly wage” resonated with many and was relatively well received by our readers.

I wrote about “a dollar for utilitsation” previously, which discusses how we assign a dollar per ustilisation for usage of our stuff, mainly the non-perishable items.

In fact, that is how I use to assess my purchases. Every time I made a purchase, I would ask myself, would I use it at least X times since it cost $X? It has helped me well in my decision making and has since curbed me from buying quite a few items since I started implementing it a few months ago.

The article that Dave wrote, however, explores the premise of how much your real wage is, after deducting other areas that might have cost you while earning your salary. Some of his examples might be applicable but some probably not. However, it did set me wondering. In all honesty, I already know that my real wage is not equivalent to the amount of salary that I am drawing because I work long hours. If you divide the wage amount by the actual number of hours I worked, my hourly rate actually went down quite a bit. If I were to include the other extras that would be required to maintain my professional working life, it would go down even further.

Even though I did not perform a thorough calculation, by randomly adding in a few numbers that I could think of at the back of my head, I could already imagine how low my “real” hourly wage is.

Dave talked about using that real hourly wage as a benchmark against any of your purchases. For instance if your real hourly wage is $15, and when you are about to make a purchase for something that cost $30. Think of it such that you need will need to work 2 hours to earn for this. Are you going to spend 2 hours of your hard earning money and time into purchasing this?

Yes, this new mentality and questioning would probably open up another chain of thoughts. Personally, I think it would reconfigure our spending habits, and be more mindful about each and every dollar we spend, since we now know how much we actually earn.

The good thing with the method is that when we calculate our real hourly wage, the actual figure becomes much lower. If you were using the normal method, your hourly wage could be maybe $50? But if you take into account the other peripherals etc., it would be much less, or even less than a third of what you think you made. And the lower the figure, the greater the impact when you think about each purchase.

 

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