[Lisa]

For instance, if you make $20/hour and you’re looking at an item, do you say “that would be one hour of work?” Do you ever factor in taxes?

For even numbers, let’s say you make the afore-mentioned $20/hour, and therefore your federal tax bracket is 12%. That $20 is now $17.60. Obviously state taxes vary, but the average is around 9% (taxed on the $20), so you’re now down to $15.80/hour. But wait, there’s more! You’re also going to pay SALES tax (state and local). The lowest state tax is 4% (and doesn’t include local), so minimally you are paying .80 on that $20 purchase, or $20.80. However, you’re only making $15.80/hour, so it’s more than one hour you have to work for that purchase.

I know – that’s a lot of math. This doesn’t take into consideration any costs associated with your actual work either – time/money to get to/from, etc.

It can be a bit eye opening to think about what an item truly costs in relation to your salary. On the flip side, if you can save pre-tax, those savings add up much faster!

[Rachael]

I factor this in often on purchases.

I also factor in my time, as it has value. Example: time spent looking for deals. If you run to 5 Walmarts looking for discount laundry soap you saw someone posted have you really saved much in the end?

You used gas, wear and tear on your vehicle, time that could be spent with family or being productive around the house, or making money.

Don’t miss: Any suggestions for cutting costs while not still havinf a nice memory/ceremony?

[Joanne]

Yes, always. How many hours will I have to work to pay for it?

[Shelley]

I use hourly and really just for bigger purchases… Is it worth me working 3 days for? 1/2 a day?

[Susy]

Depends. For things like clothes, I price per wear lol

[Ashley]

The only thing I ask myself when purchasing something is “is this in my budget?” If not, I don’t get it. Or I would need to take money earmarked for something else to cover this purchase.

If I’m making $20/hour, I probably don’t have $40 to spend on a want even if it’s worth “2 hours” to me because I’m probably living in survival mode just to cover basic expenses.

Also, if I don’t have a job that allows me to work extra hours to cover the extra expense I’m about to throw into my cart, how am I going to make that $20/hour?

This assumes that every hour I have the ability to make an extra $20 and that I’d actually work that hour instead of sitting around watching tv (or spending time with family, etc).

Explore these too: Tips on lowering electric/water bills?

[Jacque]

There you are Lisa! You my silent spirit sister….aaaah ty I thought I was alone in this.

[Megan]

We do, but primarily when it comes to labor. If you make $20/hour and it’s going to take you 8 hours to install a dishwasher because you don’t know how to do it, but the installer will do it for $75, it’s worth the time/money for the installer to do it.

We sometimes do it for larger purchases, and include sales tax then.

We don’t include income tax because while you might fall in the 20% tax bracket, you likely don’t pay 20% based on credits and deductions.

We fall in the 24% bracket, but pay zero in federal taxes because we have 6 kids, invest in retirement, have a mortgage etc.

We haven’t always paid zero, but we’ve never paid our tax bracket because we’ve always had some deductions/ credits (either based on income, home ownership? Investments, etc) If you get a tax return, you don’t pay the tax bracket that matches your income. If your refund is more than you paid, you don’t pay taxes at all.

Also, check out: Small tip: Get a smaller trash can, pay a smaller trash fee

[Joan]

Yep. Learned this point of view from reading Henry David Thoreau. It helps curtail frivolous spending!

[Ann]

Being home with children can be very demanding but with family support upgrading your work qualifications with online (legitimate good schools) is a great way to leverage.

Your time at home and re enter work force with a higher set of skills.

Local community colleges can offer information on this.

[Author]

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