RULE # 2: Think about hours earned vs. hours spent

We all have different schedules; many of us earn different amounts of money, but we all have to think about the same thing: when we want to purchase something, we have to think about how many hours it took us to pay for the product we want to buy. 

Thinking about your purchase in terms of how many hours it took you to earn your money is a good way to prevent impulsive purchases. I’m not a mathematician by any means, but when I go to the store and I want a new purse or pair of shoes, I do a simple calculation. The shoes are $80.00 plus 13% HST (in Ontario, Canada), so the total cost will come to about $90.00. But how long did I have to work to pay for those? 

Hypothetically, if I was making minimum wage ($10.25 per hour in Ontario), which is a typical wage for students, it would take me over a day to pay for those shoes.

Here’s a detailed breakdown: 

Hours worked: 9.75 @ $ 10.25	$    99.93
Income tax (9.9%)	- $      9.89
CPP (4.95%)	-$      4.94
EI (1.88%)	-$      1.87
Total:	$    83.23

Based on annual incomes ranging from $20,000 - $40,000. Deduction rates have been acquired from the government of Canada website, http://www.cra-arc.gc.ca. This chart is illustrative and is not intended to replace professional advice.

As a student, each and every day counts. We are busy people and often have many expenses including tuition, rent and a long list of other bills. So think long and hard, and ask yourself some important questions: is this purchase worth it? will it set me behind on my payment schedule? or have I already saved enough for this expense? 

If you have been a diligent saver, then go ahead – treat yourself and don’t delay any longer. But if you have been struggling to keep up with your obligations and you’ve been living paycheque to paycheque - just save a little more, wait for the product to go on sale and then make your purchase then. Patience, as they say, is a virtue.