This is the first post for my Money for Dads blog, and I'm excited to share this blog with the world. Some people prefer audio, and they can find the podcast version of this post here.
As this is the first post, I'd like to you an overview of what you'll be learning in this blog and what I'll be discussing. So, I'll talk about hints, tips, hacks, stacks, philosophies, stories, and more. I'll discuss all different ways that you can save money, stretch your money, and think about your money. I want you to change your relationship with money.
What's the real goal of this blog? I want to show you and your spouse how you can stop being forced to pick up extra jobs and shifts and overtime. I want you to learn to use the money that you already make to live the life that you want.
Everything that I'll be talking about, for the most part, isn't really time consuming, either. As much as I want help you save time by not having to work extra, I want save you time on your time, too. So I'll help you automate your finances and learn to do things quicker and faster and better.
Through this blog, you'll never find me sharing way to that suggest you spend (i.e. waste) any time on complicated, time-consuming strategies to save money, because you don't have time for that. You're a busy dad, just like me. We have to spend time on the things that really matter, like our families.
Before I begin - in case you don't already know - I want to share a bit about myself so you know who I am. My name is Adam Katz and I live in suburban New Jersey with my wife, Masha, and our four kids - ages 8, 6, 4, and 1. My wife is a Physician Assistant in a hospital in the Bronx in New York City, and I work as a manager for a nonprofit. We want to spend as much time as we can together and with our kids. And we also want give them the best life possible.
My wife and I work really hard. We have to because we send our kids to private school for religious reasons - and our baby is part of a nanny share - and it's really expensive. So we have to be able to afford that. To do that, we must spend smartly. We must spend wisely. And it helps that I love personal finance. I love it so much that I actually wrote a book on it. It even it #1 on Amazon in 19 categories.
The book is about how I stretched mine and my wife's income by 34%. This stretching effectively gave us 34% raises at work... and it's amazing. That's what this blog is about: Ways to help you stretch your money in totally doable, simple, and sustainable ways. It's to help you stretch your income like I did to be able to live a life that you really want to live.
That brings us back to the content of this post. As this is the first post, I'd like to talk about a fundamental idea that can help you change the way you think about money, the money you make, and your time. This idea was actually told to me by my grandmother because she - and apparently everyone else in my life - knew that I was a compulsive spender and a shopaholic.
My grandmother sent me an article almost over 15 years ago, which at the time I found only intriguing... but I saved it, and over time it has sunk in more and more until it really became kind of like a foundational element to my personal finance theories.
The idea is about the time that it takes you to earn the money you're about to spend. An example would be if you make say $25 an hour after taxes and you're about to buy something that costs $100, it just took you four hours earn what you are about to spend.
That's four hours at your desk, at the machine, behind the register, on the phones, or whatever it is that you do. It took you that time to earn what you're about to spend. So think about the money that you're spending that way. How long did it take you at your job to earn what you're about to spend? And if you think about that before you make the purchase, it'll put a little twist on your thought process and help you think twice about whether you should buy it or not.
You may be thinking now that you make a salary, so you don't get paid an hourly wage. Well, you know what? Everyone, including me, who gets paid a salary effectively does get an hourly wage. If you know how much you make per year, how many average hours you work per week, you can figure it out.
You can actually go to my website moneyfordads.com and I have a totally free calculator section on there. There, you can input your numbers and it'll tell you how much you make per hour. It's really simple and it's really important. So, if you don't know how much you make per hour and you make a salary, go to my website and find out now.
So now that you know how much you make per hour, think about the last few purchases you've made. Did you buy something for $1,000, $500? Let's give an example here. I ran some numbers.
Let's say you make $52,000 a year. That translates to an hourly pre-tax wage of $25. To keep it simple, let's stick to just pre-tax wages. If you spent, say $500 on anything - a TV or tools, for example - that's 20 hours of work at $25/hour. That's half a week of work. Or say you spent $1,000. That's 40 hours, or a whole week at work. Think about it that way. Whether you make $10 an hour, $25 an hour, $50 an hour, use that hourly figure to help you inform your decisions.
Sometimes you may simply need to make an expensive purchase (tool set, crib, etc.) or pay bills (childcare, car payments, etc.), so, just buy it. However, make sure you are still spending wisely and not wasting your money (and time at work) by going overboard with a fancy car or tools you'll never use. Be smart.
So, overall, for most purchases, think about the amount of time it took you to earn what you're about to spend. It will change your life.
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