What is your latest shopping spree really costing you? It's definitely more than just money.

Today we are going to be looking at what I call the real cost of buying stuff.

I’m living a very frugal life right now. Years ago, I changed my spending habits because I wanted to live a more minimalist lifestyle. Unfortunately, due to health issues and my inability to work at the moment, I have had to rethink my spending habits for a whole different reason.

On top of that, Australia (and many other places in the world) are dealing with a cost of living crisis. Everything has gotten a lot more expensive over the last couple of years.

All of the above has certainly got me thinking about how I spend my money when it comes to shopping for things like clothes, shoes, or household items like a kitchen appliance.

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Here are my thoughts on the real cost of buying stuff.

To be crystal clear, I am not a financial adviser or money expert of any type – far from it. These are purely my personal thoughts.

The real cost of buying stuff

When you are about to buy something, do you ever ask yourself, how long will I have to work to pay for this item?

Say you get paid $25 an hour (after tax), and you buy a $300 pair of shoes; that is 12 hours you would have to work to pay for them. Even if that purchase was much cheaper, say $25, you still have to work one hour to be able to purchase the item.

If you love your job, one hour won’t bother you much. But if you hate your job, suddenly working that hour to pay off something you don’t really need (that is most likely to end up in the garage, on a shelf somewhere collecting dust, or in a landfill in the not-too-distant future) takes on a whole new meaning.

This time – money trade-off became very clear to me when I was unhappy at work.

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Of course, this very simplified equation doesn’t take into consideration some important points. You have to factor in paying all of your bills out of your $25 an hour as well.

Years ago when I was in my full-time admin role, I realized I had to work roughly two days a week just to pay my regular bills. Two days out of five. That left me with three days of cash to save, spend, or invest.

But that was way before the cost of everything skyrocketed!

If you add in mortgage and car payments, you might find that you are working 5 days a week, just to pay the bills. That leaves little or no money for having a social life or saving for emergencies.

It certainly begs the question. Do you really want to spend your hard-earned cash buying crap you don’t really need?

Now go back and look at that original $300 purchase. Suddenly, your 12 hours are blown sky-high when you factor in your other bills and expenses.

This is one of the reasons using credit cards can get us into so much trouble. We are spending money we have not earned yet. Money that is already allocated to other expenses.

If you are paying everything on a credit card, you have to factor in the interest rates if you don’t pay the full balance every month. If you are in a job you hate, think how much more frustrating it will be working simply to pay off interest on overdue credit card payments! Your $300 item is now costing you a lot more. Not to mention causing you a lot of financial stress.

You might be thinking I don’t need to worry; I make $400 an hour. While that’s great, I am sure your living expenses are also much higher. A lot of people who make more money also spend more money, so you might still end up in the same drowning-in-debt boat.

If you are constantly living beyond your means and spending more money than you earn, you will struggle financially.

I have watched a few YouTube videos lately, and it amazes me how some younger people think that a credit card is free money. Credit cards are definitely not that. You need to pay that money back with interest, lots of it.

I think it’s about being strategic about how you spend your money. Spend money on something that actually means something to you.

For instance, I love to travel. I don’t consider any of the trips I have taken a waste of money.

Of course, money is not a travel priority for everyone.

I had a friend who always wanted to go to New York. When I asked her to go along with me, her answer was usually I can’t afford it. While New York City is an expensive place to visit, the truth is that she could afford it; she simply needed to make sacrifices in other areas.

That same friend had a long weekend away in a luxury apartment and spent a lot of money on Christmas presents for family. If she had spent less on accommodation and presents, she would have three-quarters of the money she needed for a New York trip. She could have been on the plane and booked her accommodation with that money.

What it all came down to was that going to New York wasn’t a money priority for her, which is perfectly fine. But she needed to stop pretending that it was something she really wanted.

No one wants debt collectors or credit card companies hounding them for money. No one wants tension between family, friends, or partners over money.

You must know your own personal money priorities, what sacrifices you are willing to make for what you want, and work out just how much that fancy kitchen appliance that will sit in the corner of the cupboard and never get used is REALLY going to cost you.

Know the real cost of buying stuff and use your money wisely.

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