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Kim’s Tips for Spending Wisely

Money Smarts with Kim

We know it’s hard to keep track of every expense, but it also isn’t realistic to pretend it’s not happening. Here are some tips and tricks from our CEO and President Kim Sponem to help you spend wisely.  

When it comes to spending, I do not give it much thought. Is there a simple way to spend more wisely without a bunch of tracking and calculating?

Yes, there are several easy ways to make wiser spending decisions. One easy way to impact your spending is to remind yourself that money is time. Yes, you read that right. Start thinking in terms of how many hours you need to work in order to pay for the item you want to buy. If you are paid a salary, instead of hourly, here is an easy way to calculate your hourly pay (based on 40 hours a week for 52 weeks):

Take your annual salary and divide it by 2,080.

  • For example:
    • $50,000 annual salary divided by 2,080 = about $24 an hour
    • $30,000 annual salary divided by 2,080 = about $14.50 an hour

And remember, your spending money is “after tax,” so while you might make $15, $20, $30 or even $50 an hour, your spending money after tax will be less than that.

Let’s say you make $20 an hour. You go into a store and see a pair of shoes half-off that were originally $80. They are now $40. Great deal! Maybe. If you had shoes on your list of things you needed, then yes. If not, what are they worth to you? Instead of thinking, “Wow, I can save $40,” you should think, “That one pair of shoes will cost me two hours of work. And, if I charge them and pay interest, I’ll be working even longer to cover the cost.” Is that pair of shoes worth two or more hours of work?

Now, let’s say you make $15 an hour and you are considering dinner options. “I don’t feel like cooking anything, so maybe we should just go out.” Let’s assume dinner out would be $60, take out would be $25 and groceries would be $10. What if you added this thought to your considerations? At $15 an hour, you’d have to work about four hours for dinner out, about two hours for takeout and less than an hour for groceries.

Besides the hours, consider the other trade-offs when you are about to spend. What about the “little” things? An extra toy for the dog: $3; a bag of candy for my desk at work: $4; a 50 percent off picture frame: $8; a cool phone cover: $10; fun Post-It notes: $2; or your choice of splurge: $2. Add it all up and you’ve spend $29, but on what? You won’t remember any one of these purchases. If you, instead, decided not to buy those things, went onto your Summit App and transferred the $29 from your checking to savings, you would have that money working to reach your goal – a vacation, car or house down payment, school, etc.

Two thoughts to leave you with as you consider making purchases:

  1. Is that item worth the hours you need to work to pay for it?
  2. Is the item more important than your savings goals?

You can see how these simple shifts in thinking help keep your focus on real costs, so you can make wiser spending choices and feel better when you do (or don’t) make a purchase.

Finally, use time to your advantage. Many people have had success by making a pact with themselves: “If it is not something I need, I will not buy it for at least 24 or 48 hours.” Often, the urge to buy goes away with a little time and distance.

All of these approaches can help you make wiser spending choices. Whether you are a member of Summit Credit Union or not, you can find many more ideas in the Money Smarts section of our website at