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Can you be happier with less?

About 4 years ago, I started noticing in my own life that I was trying to keep up with everyone.

  • Hours worked compared to other employees.
  • Amount of projects I would pick-up even if my time was already overbooked.
  • Setting unreasonable expectations and accepting them as my goals.
  • Making sure I had the right clothing and items.

Then, I realized your time is limited.  You always tell yourself that and remind yourself over and over again.  Do we live life like it is a short and limited time?  Do you live everyday like you appreciate your time and are living this time for you and your loved ones?

Quickly, you begin to realize the things we have in our lives are nice, but at what level of sacrifice are we willing to give up on living life to get “stuff”?  This was the big question and when life really began to change for me personally.

Once you have made the decision that life is more important than “stuff”, you can then begin asking several questions.

  • Do I want this or do I need this?
  • How much joy or how much is this going to give me in time?
  • Break down your after tax income per hour and then every time you make a purchase, divide that number into the cost to see how many hours you need to work in order to pay for that particular item.  Are you willing to work X hours to get that one material item?

I like examples, because they show how reality in action.  If I look at a car that costs $15,000 new that I really want and I will even cheat and say that I have the cash to buy the car instead of what most people do and take out a loan, so that car really costs about $20,000.  Or should I purchase that $3,000 car that is a solid car, but obviously not new and not something our friends are going to tell us is awesome!

So to pay for a $15,000 car at lets say someone makes $25/hour at their job (great pay in this age, but good for the example).  So remember $15,000 in income is after taxes so you actually need to make about $23,076 if you are in the 35% tax bracket to really make $15,000.  Gotta love taxes!  That equates to 923 hours of work to pay for the car or 23 weeks of work!  Remember this is calculating with a very nice income, some people make more or less.  I also calculated this without a loan.

Now let’s visit the $3,000 car to see what effect that will have on our $25/hour lifestyle.  Because we are loyal taxpayers, we need to actually make $4,615 to get $3,000 to pay for the car.  That ends up being 184 hours of work or 4.6 weeks of work.  So just over a month of work vs. working for almost 6 months of the year to pay for a car.

You also need to take into consideration that a car you purchase with cash does not require full coverage insurance, which is also an added cost compared to just having to carry liability.

Easy math in my book!  Next time ask yourself how many hours you need to work in order to pay for that new cell phone plan or that new car.

{ 2 comments… add one }
  • Samantha July 23, 2012, 12:14 pm

    I started looking at things in the terms of hours awhile back and realised I wanted far less thinking that way. I think we get into a habit of thinking it’s only so much and don’t look beyond that. . . but I have neither cell phone or car and no plans to buy either

    • Larry Chasse July 25, 2012, 1:01 pm

      I am really impressed by folks who can go without a car as well.

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