Valuing Your Time as Money
Time and money have one thing in common, once spent you can’t get either one back. You can always earn more money, but there is only so much time available. So how much do you value time? Is there a way to increase your valuable time?
Time for Math
Setting a dollar value on your time should be pretty simple, it’s what you earn per hour, right? Well, not exactly, there is overhead involved in that equation. Commuting time counts as time spent on work, shuttling your kids to and from daycare counts, and the time you spend answering emails and business calls outside of work counts. So, while your job might officially be 40 hours a week, your daily commute, drop off time, and extra communications could potentially add an hour every day on average.
An example of how these change things is: $52,000 per year divided by 52 weeks then divided by 40 hours is $25 per hour. Now add in those extra 7 hours and you get $21.28 per hour. And do you really only spend 40 hours a week at your job? How many days do you eat lunch at your desk so you can keep working or stay late to finish something? I’m betting most people skip lunch out at least twice a week and add 15 minutes to each day in early arrival/late departure. Whoops, that’s another 3.25 hours each week. We are over 10 extra hours now, so you are at a 50-hour week. This means you are earning 20% less per hour than you think or working for free 20% of the time. Ouch.
How to Use This
I have touched on this topic before in a Facebook post, I know how much I net per hour. In fact, I have a bright pink sticky note on my computer reminding me of the amount! Then when I’m tempted to make an impulse purchase, it’s really fast to do the math for how many hours I’d have to work to pay for it. When I put a new pair of designer shoes in terms of “x hours” to pay for them, suddenly they aren’t so tempting.
The same thing works for your business time, it might be worth spending 15-20 minutes at the end of the workday answering emails and voice mails to make sure your personal time isn’t disturbed. I used to love turning on my “out of office” auto-reply on Friday as I walked out the door and then resisting checking email until I returned to work Monday morning. It felt like a gift I gave myself every weekend to ignore work-related things.
Sometimes the Cost Makes Sense
I read an example of someone not wanting to pay a high shipping fee when he could use an hour of his time to get the item. First, he had to calculate the value of his time as a self-employed person, then weigh the pros and cons. He never did say what his answer was, but I know I make those judgment calls about time and money frequently. In fact, this week I took into account not only my time but the “Target tax” of the temptation to spend more money in the store, to remind myself to pay a little more to have an item shipped to me. I’d say that Amazon does the same thing. I can either take the time to drive to a store to get something for a few dollars less or click and have it arrive in two days or so.
Phone Calls Take Time
I’ve said it before, and I will say it again: I HATE being stuck on hold. Sometimes it’s unavoidable like my call to the insurance company the other day to find out the status of a claim. However, there is a way to outsource making a very frustrating series of calls by signing up with BillCutterz. Our Savings Experts are here to spend the time on hold and then the time negotiating rates on your monthly bills so you can spend your valuable time in other ways.