Previously we calculated how much we are really worth per hour and how it is far less than we thought. Now I hope to pull it all together into a usable concept. Believe it or not, figuring your true hourly wage is all about debt. Doing this exercise will help you get, and stay out of, dept forever.
The reason we all go into debt is to overcome some unhappiness in our life. We use debt to live a life we really can’t afford. Very rarely do we use debt to pay for some catastrophic expense like medical bills. And even when credit was used for these things, it’s usually because we spent too much money trying to be happy and didn’t plan for emergencies with insurance and savings.
Think about the things you’ve used credit for; vacations, cars, eating out, etc. All of these are luxuries including the car. Do you really NEED the car you drive or is it possible you could have gotten by with something less expensive?
So how does the above exercise help with debt? If you’ve done the exercise as I’ve suggested, every time you make a purchase, you’ll ask yourself if it’s really worth it. You’ll remind yourself that you make $X per hour and will have to work Y amount of hours to buy that thing.
That thinking will dramatically change what you spend money on. You’ll only buy things you’re willing to exchange your life, for your money, to get.
You’ll remember that in order to buy that thing, you’ll have to spend X amount of hours away from your kids, your spouse, or whatever you enjoy doing, to afford it. You’ll make better buying decisions and get far more pleasure out of life.
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