How much is your time really worth?
As with most things in life, when it comes to comparing time vs money there are people on both ends of the spectrum.
There are some people who think it is a valuable use of their time to wait in line for five hours to redeem a coupon for a free $4 yogurt.
These people are idiots.
They have no concept that their time is a valuable commodity.
But then there is a second group of people on the other end of the spectrum.
These people know that their time is valuable, so they spend money in order to save time.
While this is better than the first group, the second group is usually just as wasteful. Not with their time, but with their money.
These are the people who say things like, “It’s worth my time to pay an extra $15 to not have to wait in this line for half an hour.”
To some this may seem like a sound investment. If you make $30 an hour, then half an hour of your time should be worth $15. While this may sound logical on the surface, this thinking is extremely flawed. It assumes that every hour of your day is worth an equal amount of money.
Most people fail to realize that just because they make $30 an hour at work, doesn’t mean their time is worth $30 an hour. Unless you have an automated income stream which makes money even when you’re not physically working, your time is only worth money WHILE YOU’RE WORKING.
In order to make smart time and money managing decisions you need to figure out how much your time is really worth.
Luckily this process is fairly easy. Just take what you make each week, then divide that number by 168 (the number of hours in a week).
So if you make $30 an hour and work 8 hours a day, 5 days a week, that means you make $1200 per week.
Divide that by 168 hours in a week and you can see that your time isn’t really worth $30 an hour. It’s only worth about $7 an hour.
That’s how much your time is really worth.
Now that you know an hour of your time is worth $7 would you be willing to spend an extra ten minutes negotiating on price with someone if it meant saving $15?
Would you be willing to spend ten minutes on the phone with your bank getting that $12 maintenance fee refunded?
When you realize that you’re not always being paid you start to see that you’re time isn’t really worth as much as you thought it was in financial terms.
You also begin to realize that seemingly small amounts of money start to add up.
Once you know how much your time is really worth, you can actually start making good decisions in terms of how you manage both your time and money.