How much is your time worth?
Time is money. We’ve all heard that saying before, and there’s a lot of truth that comes from that statement. Of course, you most often hear it from people that are incredibly rich and incredibly busy, and they are often wearing tuxedos and smoking cigars. I’m definitely not one of those people, but I like to try to figure out how much my time is worth. This is something that I’ve been doing for a couple of years now. See, I know that when I go to work I am trading my time for money. I am paid an hourly wage, and the more hours that I spend at work, the more money I get on my paycheque. But what about outside those hours? What happens when we go home, clock out, and forget about the workweek? How much is your time worth then?
I remember when a minimum wage job seemed like a lot of money. I was young, was finishing high school, and got a job at just above the minimum wage. Instead of going to school and being bored for six hours a day, I traded my time for going to work and being busy for 8 hours a day. I loved it, and I loved the giant paycheques I was getting. Now, however, I don’t think I would feel comfortable taking a minimum wage job. I feel like I’ve grown, gained a ton of skills and experience, and am a much more valuable employee. Likewise, when I was younger, I was always striving for the best deal possible. I may have thought an $8/hour job was beneath me, but I was more than willing to spend all day finding the best deal on a piece of computer hardware or searching for a bargain on craigslist, even though a day’s worth of effort might only save me $10.
Now, my perspective has changed a lot. I’d much rather not bother with doing things that take a lot of time, and would much rather spend a couple of extra bucks not getting the best deal possible if it takes less time to acquire or keep the item. For example, I could save a ton of money by making my own laundry detergent. I’ve read about it, I’ve considered doing it, I know what I would need to do in order to make my own laundry detergent. But I haven’t done it, and I’m not planning on it, simply because I don’t think it’s worth my time. It’s probably a worthwhile thing to do, but I’d much, much rather just buy some when I’m already at the store rather than go through the hassle of creating my own. See, when I was younger, I felt like I had a lot of time on my hands, and I was more than willing to give a bunch of it up to get a couple of extra dollars. Those extra dollars would go a long way. Now that I’m dealing with finances on a lot larger scale, I’m realizing that my time is worth more money, and dealing with those minor issues simply isn’t worth my time anymore. If I translate that to the fat cat CEO, I can definitely see how very large amounts of money could easily be lost or dismissed simply because there isn’t the time to do the micromanagement required to get the best deal possible or save the most money. Even on a non-business scale, I often see a lot of older people more than willing to pay more money for something that “just works” (see: Apple computers) rather than deal with the hassle of something cheaper (see: Linux).
So here’s the point, the big crescendo of this mental exercise. We need to realize how we view our time and our money, and we need to be okay with how we’re spending these finite resources. Do you have a lot of time on your hands? Find ways to turn that time into money. Do you have a lot of money and no time? It’s time to relax about the little details and small dollars and give those things up in order to give yourself more time with your family, friends, or whatever you need in this life. A lot of personal finance advice you read might tell you that there’s only one correct answer – getting, saving, and keeping the most money possible. It’s not true. Money is a resource we can trade for things like time, and entertainment, so if you have an excess of one, then learn to trade it for another without stressing out over the details or principle or whether or not you’re doing it “right”.
What is your time worth? What do you have more – time or money? How do you trade each resource for another? Sound off in the comments.