You know how much that new TV costs, but how many hours will you work to pay for it?
That's the question you should ask before swiping your credit card, according to MoneyNing founder David Ning. The financial guru said he uses a simple equation to discourage splurging: Divide the cost of a potential purchase by your hourly wage to determine whether it's worth the work.
Cost of item / hourly wage = hours you'll work to pay for it
According to Ning's observations, $39.99 is what a lot of people spend on everyday purchases.
"If you get numb [to buying things] and $40 seems like nothing, but you're making $10 an hour, you really have to work four hours just to make that money," Ning told NBC News BETTER.
Salaried workers will need to do a little more math to figure out this equation, he said. For example, a person making $60,000 a year, after paycheck deductions, is probably making around $20 an hour, he said.
"So even if you make $60,000, that $40 purchase is still going to cost you two full hours,'" he said. "When you think about it that way, a lot of people are like, 'Whoa, maybe that $40 isn't really worth it.'"