## Saturday, May 12, 2018

### Quick Personal Finance Lesson: What these 4 things are costing you each week/month.

I like the focus of this blog post here: Beware the Four Horseman of Personal Finance.

It cites 4 basic things to AVOID in order to vastly improve your personal financial situation: Cigarettes, Alcohol, the Lottery, and Dining Out.

Using average weekly spending on these items, I will show you how much these things cost you in time relative to some an hourly wage.

Depending on individual purchasing behaviors, the following numbers could be just right, too high or too low. You can adjust the numbers for your or your families situation.

1.  Cigarettes: Average price is \$5.45. If you smoke a 4 packs a week it will cost you \$21.80

2. Alcohol: A 24-pack of beer costs approximately \$15.23. Assume only one per week.

3. Lottery: It is difficult to find accurate averages, so I am going to use \$25 per week as a relatively low estimate (remember, these are averages).

4.  Dining Out: \$50 per week. This number might be too low but I am going to use it to represent the difference between the cost to you of a meal out as opposed to one you would make at home.  Of all the things listed above, eating food is a requirement!

So, our total for the 4 categories is \$112.03 per week.  If we divide this number by an hourly wage you can calculate how many hours you have to work in order to earn enough money to buy all these items each week.

If you earn the minimum wage of \$7.25 per hour you would have to work 15 1/2 hours (nearly 2 days!) to make enough to purchase this items.

\$9.00 per hour = 12 1/2 hours (a day and a half)

\$10.00 per hour = 11 1/4 hours

\$15 per hour = 7 1/2 hours (almost one day).

Keep in mind the wage is NOT taking into account a subtraction for taxes or other deductions, so effectively the hourly wage would be lower and the hours worked would be HIGHER.

If we were to extrapolate the spending out to a months worth (4.3 weeks in the average month), the \$112 per week would be \$481.60.  One year: \$5,779.

\$481.60 PER MONTH in spending the YOU CAN CONTROL.

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