How to Calculate The True Cost Of a Purchase

Imagine the last time you were in a store staring at something you wanted to buy. You probably ran the cost through your head and compared it to the amount of money you had available to spend.

We all do it. After all, that’s how we were taught to know if we can afford something or not.

But stop for a minute and think. There might actually be a better way—a way that can help you sort out what’s really important for you versus what is just a temptation holding you back from reaching Financial Freedom. A way to calculate the true cost of a purchase.

Dollars Are Just A Currency

We’re paid in dollars. Dollars are a handy way to convert many different types of value into one, common tradeable substance. Without dollars, we’d still be bartering peas for chickens!

But when you’re working for money, you’re trading your time for dollars. We want to disrupt that connection with a Freedom Generator so you don’t have to trade time for dollars. But until you’re Financially Free, that’s how the game is played.

This is huge. Right now “dollars” are just a surrogate for your time.

Thinking about purchases in terms of dollars is deceptive. Because the true cost of an item is hidden: hours of your time.

Luckily, it’s not too difficult to reframe your thinking. All you need is a basic calculator.

How To Calculate The Cost Of One Hour Of Your Time

Lindsay VanSomeren is a personal finance writer living in Fort Collins, Colorado. She is a recent college graduate who was inspired to take charge of her finances after things didn’t work out in the Grownup World as planned. Today her work appears on sites like Credit Karma, Magnify Money, and her own blog, Notorious D.E.B.T. In her spare time she enjoys reading, hiking, homebrewing, and learning to play the guitar.

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