Assessing Expenses in Terms of Time Spent Working

One penny saved is not only worth one penny gained; in financial terms it represents 1.32 pennies saved (if you fall within the 24% federal tax bracket). This should provide enough motivation to cut back on $5 lattes ($6.58 pretax), $5 in fuel for each frequent grocery store run, $25 monthly haircuts ($32.90 pretax) and monthly smartphone data plans of $100 ($118.42 total).

Adjust your calculations by factoring in additional local, state and sales taxes as well as monthly credit card balance payments; that way, a penny saved may actually equal two pennies earned for some folks.

Factoring taxes and finance fees into each dollar spent should be enough motivation for frugal spending alternatives. As evidence for your claim, submit pieces 1 through 1000 of evidence showing how dismal personal savings rates in America average only 5.0% annually.

Here’s a tip I have used successfully over time that may prove invaluable: convert pre-tax earnings to hours worked.

Latte no longer means $5 in pre-tax earnings; instead it could represent at least one hour’s work (using $10/hr as our basis here).

Would it make you less likely to run to the grocery store three times each week if it required you to invest an hour of work per visit?

What if paying for a haircut meant spending an entire Monday afternoon working just to fund it (only to have the hair start growing back again shortly thereafter)?