What is Your Time Really Worth to You?

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Categories: productivity tips, self improvement

Image courtesy of Doshiamit

How much is an hour of your time worth to you?

That might seem like a strange question to ask – but your answer to it has a big impact on many areas of your life, especially when you’re trying to make improvements.

There are different ways to calculate your hourly value: you might choose to work out your true hourly wage (in-depth, accurate calculation from Trent Hammond at The Simple Dollar). If you bill by the hour, you might go with your post-tax hourly rate. You might place a premium value on your “spare time”: in this case, consider how much you’d want to be paid per hour to give up a Saturday morning.

(It’s also worth taking a look at Charlie Gilkey’s thought-provoking post on the  Productive Flourishing blog about how your peak creative time is worth more than the other parts of your week.)

Another method is to think how much you’d consider paying for an hour of completely free time.

Once you have a rough figure in mind; say $20 for the sake of this example, you can use this as a rule of thumb to decide what’s worth your time and what isn’t. This can be valuable for:
•    Figuring out whether you should hire someone to help with your small business admin
•    Deciding whether to work overtime – or even switch to another job
•    Determining whether your frugal behaviours are really worth it

Hiring Business Help

If you own a small business, or if you freelance, chances are that there’s some tasks you do which do make the best use of your time. Perhaps you do all the administration yourself, from running errands to doing your accounts and taxes. Maybe some of the activities you’re engaged in take you ages because you’re not skilled in that area: I’m a writer, and anything involving graphics not only takes me hours but causes me endless frustration!

If you can free up an hour of your time, valued at $20, for the sake of paying someone else $15, then it’s a no-brainer: you’ll be $5 up.

This could mean:
•    Hiring a virtual assistant (you can generally find rates at $10-$15 for native English speakers)
•    Hiring an accountant (who will charge considerably more than $20/hour: but who might get everything done in a couple of hours when it would take you ten.)
•    Paying your teen to take packages to the post office, checks to the bank, etc.

Household and Garden Chores

There’s a good chance that you spend several hours a week (probably more if you have kids) on cleaning, tidying and maintaining the house. If you’ve got a garden, you’ll have tasks like mowing the lawn, watering, weeding, planting, digging… Some people love to garden as a hobby, but many others simply do it because they like having a nice-looking garden to relax in.

Have you ever considered hiring help? If having someone else do the cleaning means you can spend an extra hour a day on paying work, it’s almost certainly worth your while to hire them. As with business assistance, you might also find that they can finish a job quicker than you can.

Even if you work a 9-5 job and can’t take on extra hours, you could get a cleaner (or gardener) in order to “buy” yourself an extra hour of free time a day.

The same goes for gardening: if you always end up spending a couple of hours mowing the lawn at the weekend, you might want to “buy back” that time by hiring someone. These could become the hours you use to start your novel, research your business idea, start a correspondence course…

Frugal Behavior

I’m definitely in favour of spending money wisely, and of avoiding unnecessary costs – but frugality can easily go too far. If you end up investing an hour of your time for the sake of saving $2, it’s almost certainly not worth it.

If you’re getting obsessive about coupon-clipping, or if you spend hours trawling the shops to get the best bargains, you’re probably getting a very low return on your time.

You might want to think about:
•    Buying some convenience foods to save time in the kitchen
•    Just shopping at one store – even if you know a few items are on offer elsewhere
•    Focusing on frugality that doesn’t take extra time: eg. using energy-saving lightbulbs
•    Limiting your research for new purchases to a certain length of time (eg. fifteen minutes)

Don’t feel guilty if you opt for convenience, even when it costs a little more: if it’s going to take you twenty minutes to drive to the store and back, and you can get what you need at a small local shop for a few extra cents on each item, for a two minute round trip, go local.

What value would you place on one hour of your time? How does this impact your day to day choices – particularly those relating to your goals?

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  • http://hilife2b.com/blog John

    One hour is very important in terms of daily activity. It could be an hour spent polishing up my blog or reading an engaging book. Some people waste hours of their lives watching TV. I fell victim to this habit myself, but eventually I compared the value of my time to the value of television and acted accordingly. I’d rather invest my time into my own endeavors then watch it dwindle at the mercy of mindless reality TV.

    I do watch television about a few hours a day, but that’s only in my guilty pleasures (scripted comedy/sitcoms or cartoons).

    Thanks for posting – I’m glad I invested time into reading this article.

  • http://www.aliventures.com Ali Hale

    Glad the time invested in reading was worth it!

    I agree about TV — I hardly watch any (though I have plenty of other time-wasting vices ;-) ), because the value received so often doesn’t seem to be worth my time.

  • Bob

    I have a teenage son that does our lawn care, walk the dogs, pick up dog feces in the yard, wash our vehicles, and sometime cook meals. He is 13 but this gives him opportunity to earn money and learn some valuable skills. He does not have to undertake these tasks, but it is as an opportunity to earn his own money to purchase desired items like bikes, camping equipment, etc. I have also created a timesheet similar to what an employer may have an employee fill out to track work hours and tasks performed. Instead of giving my son anything and everything I’m trying to prepare him for the working world as he gets older and teach him that material things are not an entitlement. So while I’m trying to help my son help himself it does free up time for me and my wife to pursue future planning, reading, and a little relaxation.

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  • http://www.fuel-my-motivation.com kim self improvement and motivation

    I think an hour of my time is very valuable. I am a firm believer in the Pareto Principle (80/20) rule. If 20% of my effort equates to 80% of my results then my time is precious, especially since I work an 8 hour day. This means I have approximately 4.8 hours per day of productive activity towards goal achievement. Since I must use after working hours one hour of maximum, efficient effort is darn important.

    Thanks for the article. I love reminders such as this.

  • Sun

    I love this article in all. But time can’t always count in money. I guess the word value means money here.