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Thursday, February 16, 2012

How do you value your money?

One of the best ways to increase your ability to refrain from spending money is to find some way to measure your dollars against that is meaningful to you. We are constantly bombarded with prices of various things, and hear of billion and trillion dollar figures tossed about flippantly on tv so often that the worth of a single dollar (or even five or ten) can lose its meaning and become sort of abstract.

Finding something real to anchor its value can really help you to see the opportunity cost of your spending and help you save.

I have written before about a number of meals you can make for a dollar or less. I could use that to 'value my money' if i wanted. For example, if I was about to go to the movies for $10, I should stop and think that I would be giving up TEN meals worth of money just to see one movie. That's 3 days worth of food. Is it still worth it?

Personally, I value my money by how many hours of my life it took to get it. Right now I only make about $17 an hour, so a $10 movie would cost me well over half an hour of work, and that is pre-tax! 

If you were really into calculations, you could probably calculate how many minutes earlier you could retire for each dollar saved! Now THAT would be some motivation!

How do you value your money?

-The Money Monk

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