

How many hours of work does that purchase cost? - wangarific
http://www.bargaineering.com/articles/hours.html

======
mbleigh
This is actually a more dangerous way to think about purchases because it
presumes that all of one's income is disposable. If one makes $40,000 a year
but have $18,000 a year in rent and $6,000 a year in food and other expenses
then I can't really just say "well, this $3,000 flatscreen is expensive but
it's only really three or four weeks worth of work."

~~~
wangarific
If you were to modify the calculator to account for this, the fixed costs
should be deducted from salary and divided among all the hours worked?

So if you made $40,000 a year and had $10,000 in fixed costs, you deduct taxes
& whatnot, the $10k, and then divide by 2000 hours. This gives you a true "net
income after expenses" per hour. Yes?

~~~
onemoreact
Sure, but as someone on salary I tend to find disposable income and then
calculate that spread evenly over time. AKA I have 1,000$ this month to spend
however I like that's 1000/31 = 32$ a day or 1.30$ an hour.

I do this because I can't work more hours to make up for extra spending I can
only wait till more money shows up.

------
badclient
We saw a huge jump in conversions at work when I compared our product's price
to a cup of latte on the landing page.

I believe that we make most purchasing decisions based on comparison to
another product or a _default_ no product state when even spending a dollar
mentally seems like _a lot_ of money. One way to counter the _default_ state
is to compare your product to another product the person is very likely to
have purchased recently or does not consider expensive.

So many hosting companies compete on price between a buck/month to
$9.99/month. Honestly, I think you destroy the price argument for vast
majority of users if you just get 'em to think about the $5.99 grande coffee
purchase every morning.

~~~
tocomment
Can you tell us what you said exactly on the landing page to make the
comparison?

~~~
badclient
I can't talk much about the latte experiment.

But another one I did was display a dollar bill to really drive home the point
that our service is less than one dollar a day. Something about seeing a
picture of a dollar bill (versus just reading about it) must make it more
real.

More precisely it said "Less than $1/day {small pic of dollar bill} {big equal
to sign} Access to xx,xxx potential clients"

------
power
"The cost of a thing is the amount of what I call life which is required to be
exchanged for it, immediately or in the long run." - Henry David Thoreau

------
scott_s
Related, an article from the Journal of Consumer Psychology, "If money doesn't
make you happy, then you probably aren't spending it right":
[http://dunn.psych.ubc.ca/files/2011/04/Journal-of-
consumer-p...](http://dunn.psych.ubc.ca/files/2011/04/Journal-of-consumer-
psychology.pdf)

------
Lagged2Death
I applaud the notion of examining the way you spend your money and thinking
about whether the stuff you spend money on is really adding value to your life
or whether it's just a habit that you've fallen into.

But:

 _You can save more in one call to a cable company than skipping your morning
coffee, even though skipping morning coffee takes more work._

What could possibly be less work than _not_ buying something? Not buying
something usually saves both money _and_ time.

And I don't know about his cable company, but getting a human being from any
of my utilities on the phone is something I'd count as _work_.

------
sudonim
When we pitch our product to potential customers, one of our big selling
points is engineering time savings. It's easier to compare hours of work to
purchasing something when:

a.) It's a necessity for a business and

b.) Each hour costs you real money (like engineering time).

The coffee comparison is helpful in day to day life, but it's more about
quality than cost. Like hiring someone to clean your house, or paying for a
restaurant to make you dinner. You _could_ do it yourself, but you choose to
increase your quality of life by paying more to have someone else do it for
you.

~~~
wangarific
And when you get a professional, they're often better at it than you are. It's
a little like comparative advantage.

------
realschool
Dan Ariely has made an app that does something like this, although instead of
looking at the number of hours it takes to pay for something he compares it to
what alternatives you could buy, so if you like coffee and you want to book a
book you see how many coffees you would have to give up to get the book,
similar but equally interesting concept. You can see his app here, its the
first one Oranges2Apples <http://danariely.com/apps-tools/>

------
ThomBot
I think two important metrics are being left out of the author's perspective:

1\. What value do I assign to my personal free time?

2\. Does my purchase have the ability to save me time?

For instance, a cup of coffee will cost me 15 minutes of my salaried time PLUS
15 minutes of my personal time (to drive, order, pay, etc). However, perhaps I
am a writer and the coffee and coffeeshop environment will help me accomplish
2 hours of writing in 90 minutes. Then the whole thing is a wash.

------
alexchamberlain
An intelligent man once told me to evaluate purchases in terms of Mars bars.

