We all know that if your hourly wage is less, you take less home. But if your hourly wage is less, you also have to invest more labor to purchase the things you enjoy. For instance, if you buy a 20 gallon tank of gas for your car, you would have to work 10.9 hours for that tank if you earn $8.00 an hour before tax, but if you earn $18.00 per hour, you would only have to work 4.9 hours for the same tank of gas.
Would you be willing to work 1/2 hour for a cup of premium coffee? People do it every day. Likewise would you be willing to work almost 1/2 a week to have coffee every day? People do it all the time. When we take time to consider how long we have to work to earn the things we enjoy, our choices take on new life.
Note: Assumes 20% tax rate for federal and state taxes.
Before Tax Hourly Pay
$5 Cup of Coffee
Coffee for a Month
20 Gallons of Gas at $3.50
$350 Car Payment
$10,000 Loan at 7% Interest