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What's It Worth?

It's only $79.99! How many times have you heard those words on a commercial or read them in a newspaper ad? The word "only" is supposed to make you think that this is a great price for the product.

money shirt imageBut think about this. How long does it take you to earn $79.99? What do you have to do to get that money? Let's say you stock shelves at a discount store, and you're making $7.00 an hour. The little item that's only $79.99 is worth almost 12 hours of your work! And if you are making less than this, how long will it take to earn that much money?

So as you stand in a store, telling yourself you have to buy an item, think of how long you must work to earn the money to pay for it. Is that $85 designer shirt really worth the time and effort it takes you to earn $85? You could probably find a similar shirt at another store for under $35, right?

Even if your parents are still buying your clothes, there's only so much money to go around. If you spend money on one item, you don't have it to spend on anything else. So if you spend the $85 on those jeans, what other opportunities might you be missing out on? You cannot put it in savings. You cannot go snowboarding or to the movies with friends – you won’t have the money to go. That is what is called opportunity cost.

Check out the rest of this section to learn to spend wisely.