There is an exercise that permanently changes how you see prices. It requires no spreadsheet or advanced financial knowledge. You only need to know how much you actually earn per hour of work and then apply that number to anything you are considering buying. Most people never do it. Those who do never make purchasing decisions the same way again.
Money is abstract. Hours of life are not. When you convert prices into time, the brain processes the information differently, and that difference changes decisions.
Your real hourly wage
The first thing that surprises people about this exercise is that the salary they think they have is not the one they actually have. The gap between gross pay and what lands in your account is just the first layer of the illusion. The second layer accounts for all the time and money you spend simply because you have a job.
Consider a concrete example. If you take home 2,000 euros per month and work 40 hours per week, the apparent calculation gives you roughly 12.50 euros per hour. But that number omits several elements that exist only because you are employed:
- Commuting time. If your round trip takes 45 minutes each day, you add two and a half hours to your actual daily working time, unpaid.
- Food away from home. The lunches and quick dinners you buy because you have no time to cook are costs that would not exist if you did not work.
- Clothing and materials. Any expense you incur to perform your role that you would not otherwise have.
- Preparation time. Showering, dressing, and getting ready before leaving are time dedicated to work, even if you are not yet clocked in.
- Recovery. The convenience dinner when you arrive exhausted, the monthly massage, the gym membership you pay for to decompress: these are costs that finance your ability to keep working.
If you add up all the real hours you dedicate to work and subtract all the costs that exist only because you work, the result tends to be considerably lower than the initial figure. For many people earning a median income, the real hourly wage ends up between six and ten euros, even if they believed they were earning twelve or fifteen. The difference is not trivial.
This calculation is not an accounting trick or a way to complain about the system. It is a more honest way to measure the exchange you make every day: you give hours of your life and receive money in return. How much each hour is worth is the fundamental figure from which the exercise begins.
How to convert any price into hours
Once you have your real hourly rate, the mechanics are straightforward. You divide the price of anything by that number and get the cost expressed in hours of work.
Some examples to make it concrete:
- A premium smartphone costing 1,000 euros. If your real hour is worth 8 euros, that phone costs 125 hours of work, just over three full working weeks.
- Dinner for two at a mid-range restaurant: 80 euros equals 10 hours.
- A streaming subscription at 12 euros per month: 1.5 hours monthly, or 18 hours per year.
- A new car at 25,000 euros: 3,125 hours, more than a year and a half of work.
- A sofa at 600 euros: 75 hours, nearly two working weeks.
The exercise does not intend to stop you from spending on those things. It intends to help you see them more clearly. A phone that costs 125 hours may be entirely worth it if you use it ten hours a day and it will last four years. An 80-euro dinner may be exactly what you need on a Friday night. But when you do the calculation consciously, the decision changes in nature: it is no longer just a price, it is a question about whether that thing is worth that slice of your life.
The psychological mechanism that makes it work is that money is abstract and hours are not. When you see 1,000 euros on a screen, the brain processes it differently than when it imagines 125 hours of meetings, deadlines, commutes, and effort. Hours carry concrete emotional weight. Money does not.
What the exercise reveals about your spending
When you apply this framework systematically, expenses stop feeling equal. Some come out reinforced: you pay for them with satisfaction because your analysis justifies them. Others collapse.
The ones that tend to collapse most are default expenses: things you buy without thinking because you always have, because it is what is expected, or because the alternative would have required a minimum of planning you never did. The daily pack of cigarettes that, with this method, costs over 500 hours per year. The gym membership you have not used in eight months, which is 96 hours of work gone. The mid-range car model you chose because the basic one felt a little insufficient.
The exercise also reveals something about the difference between experience spending and possession spending. Many people discover that paying 30 hours for a trip they will remember for life feels more justifiable than paying 20 hours for an object that will sit in a drawer a month after purchase. There is no universal answer here, but the question is more honest.
A third effect, less obvious, is the revaluation of the free or the homemade. If your hour is worth 8 euros and cooking at home saves you 10 euros compared to ordering delivery, but costs you 45 minutes (that is, 6 euros of your time), the real net saving is 4 euros. That may be worth it. But if you do it out of habit or guilt, without evaluating whether that time would have generated more value elsewhere, you have not really done the calculation. Sometimes ordering delivery is the better economic decision. Sometimes it is not. The exercise gives you the information to know which.
Status maintenance spending also surfaces: the car nobody sees, the branded clothing you wear to work from home, the apartment with more square metres than you use. There is no moral judgment in pointing them out, but it is worth asking whether they are worth the hours they cost.
When it makes sense to use it and when it doesn’t
This framework works best for significant purchasing decisions, not everyday ones. Applying it to decide whether to buy a 1.50-euro coffee is excessive and can become a source of unnecessary anxiety. Applying it before taking out insurance, changing cars, upgrading your phone, or signing up for an expensive course is where the calculation has real value.
It also works well for reviewing recurring expenses. Subscriptions and automatic payments are especially useful to analyse in hours because the annual sum usually surprises. A 15-euro monthly service seems trivial; 180 euros per year is more visible; but 22.5 hours of work per year turns the question concrete: do I use this enough to justify nearly three working days of my life each year?
There are situations where the framework does not apply well. Healthcare costs are the clearest case: it makes little sense to value a medical treatment in working hours when there is no real alternative or when your ability to keep working depends on it. It also does not work well in emergencies, nor in spending with a strong relational component, such as gifts: giving something to someone you love follows a logic that goes beyond the exchange of time for money.
The framework is a tool, not an ideology. Using it literally for every decision can paralyse and create a rigid relationship with money that is precisely the opposite of what it aims to achieve.
The goal is not deprivation
The idea of converting prices into hours does not come from austerity culture, even though it is sometimes associated with it. It was popularised by Vicki Robin in her book Your Money or Your Life, published in 1992 and revised several times since. The central argument is not that you should spend less, but that you should spend better.
Spending better means that the money leaving your account represents things you genuinely value, not things you bought because it was the next automatic step, because advertising convinced you, or because you never stopped to ask whether you truly wanted them.
What changes when you apply this exercise consistently is not that you stop spending. It is that the spending you do, you do with more intention. And the difference between intentional spending and habitual spending is, over the long run, where real financial health is built. Not in choosing the right investment fund, not in optimising taxation, not in calculating compound interest, although all of that matters. In the daily decision of whether something is worth the hours it costs.
Some people, after doing this exercise, discover that their current spending already reflects fairly well what they value. That is also a valuable result: knowing that your economic decisions are coherent with what matters has intrinsic worth. The goal is not universal frugality but personal coherence. Spending generously on what matters to you and little on what does not is, in essence, what this exercise makes possible.
