Budgeting: A Lesson In Alternative Currencies

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Kittenomics #22

When beginning a budget by evaluating past expenditures, the value of your money is clear. Across the months, you can see how $3 buys a can of soup, a magazine, a coke, or a used book and how $3 spent on a cup coffee is at the cost of all of those other possible purchases. Furthermore, on the earning end of the spectrum, you might find out that at a wage of $18 per hour, those $3 represents ten minutes of working.

After setting a budget with several categories and limits on how much you can spend in each category, then the next step is to find a system to encourage you to keep to the budget. There are many budgeting strategies on how to actually pay for your purchases. However, another strategy to use is to change your mindset by using alternative currencies.

Pick a mental currency, whether its how many hours of work or how many bags of groceries an item will cost you, and use it to dissuade unwise, expensive purchases and encourage the essential, affordable ones. This kitten uses cans of cat food as her measurement. Thinking of how much food she’d have to give up helps her save money.

Way to go, kitten!

What alternative currency would you use to measure the cost of purchases?

Read all the Kittenomics here!

To read more about this topic check out Rich Dad, Discerning Daughter

Photo of Sophie taken by Darron Birgenheier and used here under Flickr Creative Commons.

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Chief Operating Officer, CFP®, APMA®

Megan Russell has worked with Marotta Wealth Management most of her life. She loves to find ways to make the complexities of financial planning accessible to everyone. She is the author of over 800 financial articles and is known for her expertise on tax planning.