
Big ticket purchases may seem like good ideas at the time, but when you break down how many hours a week you have to work to make your monthly payment on that flat screen, you may see it in a different light.

(Click the image above for a closer look.)

Finance blogger Matt created a graphical representation of how the things you own actually own you until they're paid off in full. Using data from his own "over-leveraged" youth, he demonstrates just how hard he had to work to keep his head above water. After accounting for his home mortgage, car payment, and other bills, Matt was working 17 out of every 20 days just to break even.


Setting up your own visual representation is easy—all you need to know is your base salary and the amounts of your monthly bills. Then:

Calculate your daily post tax bring home pay. Take a look at your pay stub or direct deposit receipts, and convert this number to your annual, post tax bring home salary. Then, divide this number by the number of days you work each year. For example, assuming you work a standard 9 to 5, five day a week job, let's say your biweekly direct deposit total is $1500 post taxes, retirement contributions, etc. Simply multiply $1500 by 26 paychecks, then divide this number by 260 work days. In this example, the total will equal $150 per day.

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Once you've got that figured out, take a look at each bill and determine how many days each month you have to work to accumulate the money you need to pay it. For instance, if your car payment is $600 a month, you'll need to work four days a month to pay it off. That might not sound like much, but when you factor in rent or mortgage, utilities, and more, you might discover you're working most of the month just to cover the basics.

In the end, Matt used the information to dial back his spending and finding ways to get out of debt quickly. Check out the post for some tips that worked for him. Have you ever used a similar method for getting a handle on your spending and debt? What works for you to keep your cash flow under control? Let us know in the comments.


Visualizing How the Things You Own End Up Owning You [Steadfast Finances]