Value of Money
Many people (including adults) do not really know how much time they need to work in order to earn a specific amount of money. Obviously the answer depends on your hourly wage or salary.
Even if you know your hourly wage, did you factor in taxes and other deductions from your pay?
So how long do you need to work to earn $10? $100? $1000? Take a look below. The results may surprise many adults.
Please note: this chart assumes that you are employed full-time, working 8 hour days 22 days per month. Lower deductions for part-time employees or any overtime rates are not factored in to these calculations.
$15/hour roughly equates to a $30 000 salary; $20/hour = $40 000, $30/hour = $60 000, $40/hour = $80 000, $50/hour = $100 000, and $100/hour = $200 000 salary
When you are next swooning over that new tech gadget, getting giddy over that must-have clothing accessory or planning that amazing evening out for you and your special someone, what's it worth to you? How much TIME does it cost?
The Simple Truth about Debt
You get what you want now, and pay for it later
You will almost ALWAYS pay more to get it now (that you can’t really afford)
when to use debt
Expert Opinions vary:
Making a Budget
1. Identify relevant spending categories for you at this stage of life:
2. Track your actual spending in all categories for at least two months. Many financial institutions give you free access to tracking tools, spreadsheets and apps.
3. Identify necessities & discretionary spending (needs & wants). What is the bare minimum that you could survive on given where you currently live? Anything else is discretionary.
4. Plan how much of your income you will SAVE for later, and how much you will GIVE to worthy causes ($ or %). A general rule of thumb is 10% for each of those categories, but that is up to you.
5. Establish realistic spending limits in each category. Be careful not to set limits that you are likely to blow past. If it is not realistic, you will throw out the entire idea of budgeting before you finish the first month.
6. Adjust discretionary spending if needed from month-to-month to account for fluctuating income. Depending on the nature of your job, your earnings may change significantly from one month to the next. Be prepared to save in months where you earn more to offset lower earnings in other months.
Any Goal needs an ACTION PLAN to stick to it. Financial goals are no different. Read more about goal-setting.
Most people who have money problems (at any age) have the same issue: Living beyond their means. To put it simply: they spend more money than they earn. Credit and debt enable the vast majority of the adult population to do this on a regular basis. What happens if you are continuously spending more than you earn? You are getting deeper in debt.
There are many ways people live beyond their means. Here are two of the most common reasons:
Some people really don't take the time to plan their finances. They spend whatever they feel like spending to have the lifestyle they think they deserve. When the money runs low, they might reduce their spending or look for other ways to finance their unlimited wants.
Instead, plan your finances beginning with a budget.
A budget will help you:
Impulse buying is rampant in our culture. Advertising and media actually encourage this: "you NEED that new product to make your life better, to fit in among peers, and you deserve it."
Rein in that impulsiveness with some critical thinking. Before you buy, sleep on it (at least 1 night) and re-evaluate in the context of your earnings and the necessities. Keep in mind, if you buy this, what will you need to give up (at least for this month)?
Once you get a handle on spending, you can actually save money. Pay yourself first (i.e. transfer money into a savings account as soon as possible after receiving your paycheque.
Investing for The Future
There are countless resources out there giving advice on investments. In general, a great place to start is this 2008 MacLean's Magazine Article on Saving for Post-Secondary Education.