Assigning Value to Time to Avoid Wasting It
Time is easily the most precious commodity we own; yet many of us squander it away in trade for things of lesser value.
As I rapidly approach the half century mark in age, I’ve become rapidly concerned with something we all eventually care about; how much time do I have left?
Sure, it seems morbid to start worrying about “counting down the days” but the truth is — I could easily live another 30 or 40 years; or die tomorrow.
Everyone should consider time as a fixed asset that cannot be refilled — not with love nor money — and understanding how we waste it in pursuit of lesser units of value is important.
Examples? Sure — but before we get to those, let’s take units of time and create a direct relationship to something everyone can see and understand.
Time is money. That is how the expression goes, right? But we take that term and apply it to high-paid lawyers or elite entrepreneurs that can command hundreds of dollars an hour — rarely about ourselves. That is almost criminal.
Your time is just as valuable as a lawyer’s — actually it is worth more, because it belongs to you.
How do you valuate your time? Start with your work salary — and add 20%. So if you make $20 an hour performing your livelihood — set your “personal time salary” at $24 per hour. Internalize that for a moment … “My time is worth $24 an hour”.
Great. You’ve taken the first step. Now that we have value, we can determine ROI (return on investment) on common “personal time salary” waste with specific examples.
Example 1: Shopping Online
We all love to shop online, right? Like Jack Palance said in Tango & Cash, shopping by mail is “quicker” and “easier”. Saves time and gas. Sounds like a slam dunk.
Have you ever been overwhelmed by the urge to find “the best price”? Sure you have — everyone loves a deal. You check Amazon … the Walmart. Wonder if Target has a sale this week?
Next thing you know — you’re hunting for a coupon code. Surely I can get at least free shipping if I order $35 or more?
The end result? After an hour of jumping around websites, checking Groupon and RetailMeNot, etc. you finally land on what has to be the best deal possible.
Your net savings on that $20 purchase? You scored a 5% off coupon and managed to get free shipping (which you would have gotten from another vendor without the 5% off coupon). You saved $1 total.
Was it fun? Was it a challenge? Did you enjoy it? I hope so — because it cost you $23 in “personal time salary”. That $1 you saved debited one hour from your life bank.
Example 2: The Gas Gauntlet
My goodness, am I ever guilty of this one … at least I used to be.
The dreaded gas light comes on in your car. You start scanning gas stations nearby and since you’re near the freeway, gas prices are a good 3 to 5 cents a gallon higher. “Bah, I’m not paying that”, you say.
You might have a lower price solution on the way home. You check your Gas Buddy app — sure enough, you can save a good 4 cents a gallon if you detour just a bit off your route. That will show Chevron they can’t take you for a ride just because they are close to the Interstate.
The path is still on the way home — but once all is said and done, you’ve merely spent an additional 15 minutes on your bypass route (and dinking with your app, etc.) to save your hard earned cash. No big deal.
Or is it?
You saved $.48 filling your 12 gallon tank with your side trip. In “personal time salary”? You spent $8. Even if it was just 5 extra minutes — you spent $2 of your precious time bank.
If you do this dance every week, that’s 52 * $.48 — you’re saving about $25 per year on gas. But you’re spending just over 4 hours of your time bank for the privilege; almost $100 in that currency.
That is a poor return on investment.
What about you?
I’ve provided two examples that I am willing to bet apply to everyone. Direct comparisons with time vs. money are black and white — but if you start moving to the sophomore level Personal Time Salary 201 course, you’ll find that activities themselves have “multipliers” that have to be attached to get a real financial outlook. Doing your daily grind is a 1x multipier — $24 x 1. But having sex with your partner is (hopefully) at least twice as valuable as work hours to you — so use a 2x or 3x multipier when calculating that overall time value.
If you look at your life and how you choose to trade your “personal time salary”, I wager you’ll find many things that don’t make sound “fiscal” sense when you monetize your free time.
The great news is that you really only spent $2 of that precious commodity reading this article — but if you apply it right away? That $2 will pay off in great dividends.
Have you found a “poor investment” in your time? Share it with my readers in the comments below!