It Turns Out Time Really Is Money

Hey there. I'm Rachel Corbett, and welcome to another episode of Small Change, the podcast that's all about the small changes you can make that'll make a big difference to your finances. Now, when you're spending money, it can be easy to lose perspective about the effort that goes into each purchase. So director of Investors Choice Mortgages and founder of your Property Success online education, Jane Slack Smith is here to change the way you think about how much that next purchase really costs.

How much is that doggy in the window? What if the pet shop owner turned around and said, oh, you can have poppy here for 20 hours? What I hear you say, well, it's just another way at looking at how much things cost and a direct relationship to you in so much as how much of your paid work hours it will take for you to have what you want. Let's face it, there are so many things that we all want and often we just give in to temptation. We whip out the credit card or grab the cash and get that new shirt record or even iPhone, just because you can. For many people, they claw their way to their next paycheck, scrimping and eating lentils every night for that final week. Just like Old Mother Hubbard, the cupboard is bare. For others, they have the good intention of paying off the credit card each month, but there never seems to be quite enough cash to clear the debt. And then with the interest, it just grows and grows. So what if I can share with you a way to think about your purchases in a whole new way, One that makes the effort it has taken for you to earn that money into account when considering your next purchase. For some people, it's like money goes out as easily as it comes in. For those without a savings goal, this can be even more the case. I want to share with you a fact that I've found useful to help me stop and consider before I purchase that item. Sometimes it's just taking that step back from the initial buy impulse and that's all that's needed. But sometimes you need something else to help you along and stop you buying. So let's say you want a new shirt for $50. It doesn't seem too much. You can see so many ways it will fit into your wardrobe. You, you can justify it. You've got paid yesterday, you have money in your bank. What could go wrong? Well, a loan, not so much. But it is that impulse buying adding up that can mean your account is empty long before the next paycheck. Think about it this way. If you earn, say, $25 an hour. Is that shirt really worth two hours of your time? Let's put your income into perspective. What if your rent, food, utilities, all of your costs that you just have to pay add up to $800 a week? Now, if you earn, after tax, $1,000 a week, you have four days of your working week spoken for already. One day or $200 is all that you have left to work with. So if two of the eight earning hours that you have left over goes into that new shirt, you only have six earning hours for all the other things you want. So if you're saving for holidays, maybe it's two hours goes towards your holiday account. And on the weekend you like to go out with your friends, there's another four hours on entertainment. Oh, and don't forget, you need to get your best friend a birthday present. There's another two hours. Or there's that nice tie or scarf that you just have to add to the shirt. There's an hour. Before long, you are well and truly eating into credit card territory and you've blown the extra eight hours of money that you had left. So ask yourself this next time you look at that I have to have it item, just wonder, is it worth two hours of your time? Or could you use that time for something that will get you closer to your financial goals? Maybe your savings, Maybe you could invest. Or just maybe something that will make you happier.

Is that skirt really worth three hours of your time? Not one that's going to get worn once and then get forgotten about, is it? Food for thought. Now, if you've got a question for any of our experts, or if you've got a great money saving tip, then we would love you to share it with us at smallchangenova. Podcast. Com AU and I will see you on Friday for another episode.