What You Pay in Time
You probably think about costs in terms of dollars (or whatever your local currency is). I suggest that you experiment with an alternative way of thinking — think about costs in terms of time: The time you spend earning the money. (See also: Track Your Spending. Or Not.)
There's a famous part in "Walden" where Thoreau argues that it's cheaper to walk than to take the train — if both people start from zero.
Thoreau gets up and heads off walking toward your mutual destination. You, planning to take the train, first have to go to work and earn the money to buy a ticket. Given the wages and ticket prices at the time, it's almost a day's pay to buy the ticket, meaning that Thoreau had a good chance of getting there ahead of you, even though it will take him all day to walk.
Plus, Thoreau gets to spend the day on a pleasant walk in the countryside, while you're spending the day working.
Depending on what you earn and how much the ticket cost, the results might be different for you. But the point is that you ought to do the calculation.
You ought to do the calculation for everything.
Of course, things are more complicated than in Thoreau's day. He made a big point that having to buy new clothes to undertake some new enterprise was a danger sign — it would take days or weeks of labor just to get even for the cost of your new wardrobe. He would have been horrified at the idea that having a job meant that you had to buy a car — it takes weeks or months of labor to cover that cost. (And weeks more every year, to pay for registering, insuring, fueling, and maintaining the car.)
He probably would have been horrified at the idea of income taxes, too.
That's the calculation I want you do — for any expense, what is your all-in cost in terms of time. By "all-in" I mean for you to include not just the time you spend working. You also want to include both the time you spend supporting your work habit — your commute, the hours you spend sitting in a stupor after work because you're exhausted, the time you spend on vacation escaping from your work — plus the time you spend earning the things you only need to pay for because you're working — tools, clothes you buy because you need to "look nice" at work, your car, and so on.
A lot of people have thought of making this calculation before me, of course. In particular, it's a central theme in the book "Your Money or Your Life" by Joe Dominguez and Vicki Robin. (I wrote a review of the book for Wise Bread.)
The point is to make yourself a thoughtful consumer. It probably only takes you a few minutes to earn enough to buy a snack, if you do the calculation in terms of your gross pay.
Instead, do the calculation the right way. Figure it in terms of your net pay, after taxes have been deducted. Figure it in terms of the hours you actually spend, including your commute.
Only when you do the calculation correctly do you have the information you need to make an informed decision about whether this or that little indulgence is worth it, in terms of the minutes of your life you spend earning it.
If you try to do the calculation for real, you'll run into borderline cases. Is it a work expense to hire a lawn service? If you work so many hours you don't have time to mow your own lawn, maybe it is. Is it a work expense to go to the hairstylist? If your boss insists that you look your best for customers, maybe it is. Is it a work expense to hire a tax accountant? If your taxes are more complex because of your job — or if you don't have time to do them yourself because of your job — maybe it is. No doubt part of your vacation is pleasure; it's not merely an escape from work.
Don't get hung up on details like that. The goal isn't to come up with the one precisely true number. The initial goal is to be clear in your own mind about how much of your time is spent supporting your efforts to earn money — and how much of that money is spent just to enable you to spend your time that way.
The deeper goal is to align your spending with your values.
How many hours does it take to buy a week's worth of meals? If the answer is what you expected, you're all set. If the answer is a shock to you, then maybe your spending is not properly aligned with your values. Maybe you'd honor your own values better by eating out less. Maybe you'd honor your own values better by eating less expensive meat and more cheap rice and beans. On the other hand, maybe spending the extra hours commuting and working so your family can eat locally grown organic food is exactly in line with your values.
I don't know. I can't know. Only you can figure these things out. I just want to provide this extra tool for figuring them out accurately — think about what you pay in terms of time.
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