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…
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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