The concept stems from the age-old expression âtime is moneyâ and the differentiation between wants and needs. A blog by Squirrels explores the number of labor hours it takes to purchase an item. It’s probably something we’ve all considered, but the method is powerful.
In this blog, the example used is a person with an annual salary of $ 25,000 buying a car costing around $ 25,000.
The blogger made this calculation:
$ 25,000 of wages, divided by 250 working days, = $ 100 per day.
$ 100 per day, divided by 8 hours, = $ 12.50 per hour.
$ 12.50 per hour, multiplied by 75 percent – to account for taxes – = $ 9.38 per hour after tax $ 25,000 car, divided by the hourly rate of $ 9.38, = 2,665 hours.
This meant that they had to work 2,665 hours to buy the car, and if you factor in the above calculation assuming 2,000 hours of work per year, that comes to 1.33 years of their life. worked just to pay for a car.
This will allow young people to make an informed judgment on whether the experiences are worth it.
Dr Junaid added, âIt also gets students thinking about the ‘opportunity cost’ of any purchase. A Â£ 9 theatrical release sounds good, but they might consider what else they could do with Â£ 9? “
Whiz Education has developed a Virtual Maths-Whizz Tutor which is a great way to help kids understand the value of transactions and progress in math at their own pace.
âOne of the main features is a virtual ‘store’ where students can spend the credits they have earned while progressing through classes.
“Students can buy things like virtual pets and furniture, and they can even buy clothes to personalize their avatar.”
âIt’s our light-hearted way of teaching students the basics of money management, which we believe will be of use to them later in life. “
While there isn’t much emphasis on this aspect of money in school, Junaid believes that “when taught well it can make a dramatic difference to the fortune (literally)”.