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Placing a Value on Your Time

3K views 29 replies 17 participants last post by  Fred 
#1 ·
This keeps coming up in my classes.....I usually present it and see if a discussion follows but I'd like to try it here. How to you place a value on your time? I'm throwing out the old make or buy decision. Do I mow my own lawn or hire it done? How valuable is your time?

I guess a simple way would be to attach your hourly wage at work to your time or pick an arbitrary number if you don't work and consider anything else against it as opportunity cost.

My brother used to spend lots of time clipping and using coupons. Not extreme couponing but he spent quite a bit of time. He stopped because he valued his free time more than what he was saving clipping coupons.

I know there are a lot of variables involved. If you have a huge family, perhaps spending hours each week looking for deals is the best way to get buy.

Thoughts?
 
#2 ·
If I'm working for pay, I have to make close to minimum wage at the least or the job is not worth my time. If I make something to sell, I have to make enough to cover materials, income taxes, SS taxes, and any other expenses plus some profit or it's not worthwhile for me.

I used to work as a contract sewer doing piecework. The faster I worked, the more I made per hour. I liked that. It's a great incentive to learn to work efficiently, and it really taught me a lesson about the value of time. I also learned a lot of little tricks that helped me save time.

Writing fiction was another lesson in the value of time. I wrote short stories and most of them came easily to me. I topped out at about $75/hour on average, the highest income I've ever made per hour.

I have to admit when I did some of my custom canvas work and when I worked as costume director for community theater, I didn't do it for the money. I enjoyed the challenge and did it for personal satisfaction. But if it's just ordinary stuff, it has to pay me a decent wage.
 
#3 ·
I hear a lot of people say "My time is worth $____". My view on it is, if someone is willing to pay you $X per hour to do a job, then for those 8 hours your time is worth what you're getting paid.

When you're home sitting on the couch you are not "worth" anything. Your time is only worth what someone is willing to give you in exchange for it.

Of course a lot of people consider their time spent on personal activities, with family, etc. worth more than money.
 
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#4 ·
No task is too small in terms of payback for my to try once. Not only is there the savings factor in doing things myself but there is also the enjoyment or the ecological factor. Some things might not have a very high hourly payback but I do them just because it pleases me to use my time that way.

One example was rinsing and reusing coffee filters. It was fun for a while just to see how many times I could use one filter but when it ceased to be fun, I quit. After all it didn't effect our family finances more that $10.00 per year.

On the other hand, I do wash and reuse freezer bags because I am not happy continually adding more plastic to the landfill.

These frugal tasks do not prevent me from going out and earning an hourly wage. So I'll try pretty much anything.

The task might provide savings "points", health/improvement "points", ecological "points" or just the fun factor. Making yogurt scores high for me on saving money AND providing health benefits AND ecological benefits (no little cups in the landfill) AND the fun factor.

I think the concept of "what is your time worth" rests heavily on the opportunity cost of work for a wage vs. do it yourself. If one does not have the opportunity to earn money with that same particular hour, why not use it for something productive. It's more complex than simple savings with many variables.

Just my random thoughts.
 
#5 ·
I run a business and have learnt to measure what I purchase in terms of how many customers it costs me. One tank of petrol is usually one customer, some invoices I receive may be a days work per month. I don't measure my time at home though. If I have enough money coming in to pay for my expenses then I don't count the hours on the computer/couch etc.
 
#6 ·
This has become a very important topic in our house. My husband and I both sell our time to our companies. He also has a business and is learning the importance of accepting the right contracts. You don't just take whatever work you can get, you consider how much time it will take and what your return will be. We are not hungry, so our choices are how much time away from each other are we willing to "sell".

My husband and I are retiring soon (less than 10 years). I have been unable to put a number on that and it's throwing me off. I would sell more of my time now, to sell much less in the future. If I could just come up with a number, I would be able to come up with a solid plan to work towards. I'm sure I don't want him to work past 50. That is just too much. I will be 44 when he is 50. I think that is a solid goal, but will we have enough to quit working?

Time is all we really have.
 
#7 ·
And along the same lines of the coupons, small things really do add up. I try and make decisions at the lowest level. Do I want to take the time to soak dry beans or just buy the no salt canned beans - savings are minimal. Do I want to take the time to clean the house or pay someone to do the major things and just tidy up myself.
 
#9 ·
I used to spend hours clipping coupons and I stopped. I realized I was spending way too much time only to save 50 cents on a bar of soap/box of cereal/can of tomatoes/etc.

I tend to think more now about the value of my time. For example, is it worth an extra 10 minute drive each way to go to a grocery store that has lower prices? Not only am I spending another 20 minutes(which isn't horrible) but I'm also spending extra in the way of gas.

There was a time that I tried making a living by selling items on Ebay. I would spend hours several days per week going to flea markets and antique stores, only to make very little profit in the end. It truly was not worth it.
 
#10 ·
I guess I look at things a little differently than most folks.

I don't put a 'dollar value' or 'cost factor' to anything that I do. Mainly because I don't believe life is all about living within, or to be measured by - 'monetary values'.

To me, money is nothing more that a tool that one sets out to achieve, so that they may acquire the items that they feel they need to survive their day to day existence, in the world that they set themselves up in. Some folks need boatloads to get thru the day - others live on next to nothing. (And I have to tell ya - study after study has shown that those with less (whether voluntary or thru acceptance) - tend to be the happier people on the planet).

Trying to measure whether something is 'worth your time' - based on whether you can/should do it yourself - vs/ paying someone else to do it for you is mostly based on 'what is my 'monetary worth' per hour?' - or should I pay someone $20 for 2 hours of cleaning my home while I work outside it, making $40 for those same 2 hours. In simplistic terms, the answer seems like a real no-brainer.

But it's not all about the all-mighty dollar. That is nothing but a piece of paper that we have given an agreed upon value to.

It's about what more you get out of the job/chore/project/hobby - whatever it is you are doing. You are engaging your own mind & your body. And there is no 'monetary value' that can ever be set to that. As they say in the commercials - it's priceless. And it truly is.

You can't buy more brain cells. You can't buy more red blood cells. It doesn't matter who you are, or how many dollar bills you own. Steve Jobs could tell you that one - had he been able to survive. You can't buy back years of youth or good health. You can't buy experiences (I am talking living day to day in the moment experiences). You can't buy skills handed down to you, you can't buy the satisfaction & experiences of a job well done by your own hands & ingenuity.... and on & on....

I just shake my head when I hear people say that something is "not worth my time". But yet, those same people can be caught sitting on the couch, in front of the TV, mindlessly dipping their hands in & out of the potato chip bag resting in their laps. (What is the true value of your time now)? Unless you are in a constant, perpetual motion 24 hours a day - earning boatloads of monies for your troubles - you will occasionally be caught doing something that you just might be 'under-qualified' for. But stop measuring everything by the almighty $$ bill.

If you don't want to do something - then don't do it. But never be ashamed to admit that you do something simply because - you enjoy it. Who cares how many $$'s will be netted by the end of the project. It's about engaging so much more than that. Case in point - As I sit here typing this, and prior to that - reading the timeline of this forum - I could be out in the world making some real $$'s. As it stands at this very moment - I am not getting paid to sit here in the village. So in other words - being here, right now - is a complete & total waste of my time. Right? After all, this is making me worth zero dollars per hour. (And if you figure in the electricity used to run the computer, and the cost of the computer itself, oh - and the internet access cost...) Geez.... I need to shut this thing down now & get out there & try to somehow reclaim my expected existence on the societal levels set out for me....

Not happening..... instead, I will sit here & read the forums. I will even go to other places on the web before the day is over. I will wash out my baggies, I will take the time to hang my clothes coming from the washer, instead of piling them into the dryer - I will go out of my way to leave as few footprints on this planet as possible. Whether it is the 'harder or the 'dumber way to do things'... I will work on my crafts, recycling materials into other objects for resale at the farmers market. And come summer, I will sit at said farmers market every Sat selling my wares for what many might consider pennies on the dollars. But, when I see the satisfaction of my customers, and when I spend those hours visiting with my vendor neighbors, repeat customers, new customers... well - it just makes all those hours that I spend tirelessly toiling away at what some would consider 'fruitless' - all the more priceless in my own little world...

And - I will plant a huge garden. And I will spend hour upon hour weeding, watering & doing all those things that a gardener does. I could go down to the corner grocery & just purchase those same veggies. (After all, when I figure in my time & materials growing that pepper - could I not have just bought it cheaper - and a lot more easily)? The answer is probably a big fat, yes...

But - who's counting.....
 
#11 ·
Time is such a precious commodity. There have been happiness studies in the US and they concluded that making more money does, in fact, increase happiness......but it stops at around $75,000. I find that very interesting. A recent global study was done and it really surprised me. The Perfect Income for Happiness? It's $161,000

The older I get, the more "free time" I seem to want and need. Time spent doing the things I find rewarding cannot be bought, but making good money while "working" can free up time to do the things you love.

Great reading all the responses.
 
#12 ·
That does not surprise me, Kim. If every waking moment is spent having to scratch around for pennies just to survive, it only makes sense that if more money is coming in that gives people a chance to relax and enjoy life a little, people are going to be happier. Having enough money to pay for the basics and a few extras is bound to reduce a whole lot of stress. It doesn't surprise me either that the amount mentioned to be happy is so low. It's enough, at least in the midwest, to be able to afford a decent life but still allow time and money for some extras. I think that's the goal of a lot of people. Not everyone aspires to be rich. At some point, time is more important than money. If you're forced to work long hours for low pay, you aren't going to have time to enjoy life, and that in turn makes a higher wage important.
 
#13 ·
I do think often about what my time is worth. I could hire someone to clean the house and pay them less than I make a hour. I could stop clipping coupons, but I enjoy sending 95% of them to military families overseas so that they can save. I could stop many things that I spent lots of time on..but I do them because they do save me money or give me pleasure and I am not at this point willing to lose any of the dollars I worked for. If I made $161,000., I do think I would hire a housecleaner. That would be nice...but I don't make that much money and I want to be debt free so I do my own cleaning. Most of the people I work with do hire people to do their cleaning, plowing, trash service, etc...but their debt is way more than mine and they have a two income family. I do it with one income and less debt. In the long run they will most likely be better off than me because of two retirements coming in. But I am very independent and proud of it.
My time is worth reaching my goals.
 
#14 ·
I think a lot of it depends upon what you enjoy doing. Today I finished making a recorder case for my step-daughter to use for school. I could have easily bought one, or just sent her with a big ziploc bag to use. But I really enjoy crocheting, I already had the yarn, and I had a good time making it. I don't like clipping coupons, so I don't do that. But I do enjoy looking through the sales circulars and figuring out what I can make with what is on sale, so I do that often.

The past two years we have paid someone to mow our lawn for us. Sure, my husband could do it, and we had a push mower, but I am really allergic to grass. Every time he mowed the lawn, he would have to immediately decontaminate - strip down to undies in the garage, throw the clothes immediately in the washer, and immediately shower. It just wasn't worth the hassle.
 
#15 ·
I was looking at the question from the standpoint of using my time in order to make money. I'm a professional seamstress and talented, skilled crafter and I use quality materials and do professional work. I don't make cheap, junky crap to sell so it can feed the landfills. There's plenty of that being imported, so I'm not going to produce it locally. If I'm going to put in the work, it's going to be making items that are good enough to be juried if I ever feel like getting involved with craft fairs that require that. That's why I feel it's a waste of my time to do the work and not make any money. I have too much invested not to make any money. As a professional, IMO I should make more than hobby wages for the things I do. When I get involved in any kind of production for sale, it is a J-O-B, not a hobby. I have to pay income tax, Social Security, collect sales taxes, and take care of all the details that go along with that. I have to do the bookkeeping so I know what I've spent on materials so I know I'm making a profit. It's a business, not a way to fill my time. Why should I work for hours and make pennies? For me that would be pointless.

It's different if it's for my own use and my personal hobbies. Anyone who has seen my posts and pictures regarding items I've repurposed or built/made from scratch knows I'm willing to spend what's often way too much time to fabricate something for our purposes. Often that saves us significant money, but not always. I like the challenge though, although I'm enjoying it less than I used to.
 
#16 ·
I think happiness is probably more related to spending than earning. If you earn $200K but spend $200K, you aren't going to be happy. If you earn $200k and only spend $60K, you are probably very happy and content.

Even if it isn't directly related to actual dollars and cents, there are opportunity costs for everything. If you decide to garden, you are deciding to NOT do something else with your time. Time is a limited commodity. The older I get, the more I value it.

My husband and I chose to live VERY frugally and save most of what we make, so that we can retire and do the things we choose to do with our time. We had discussions early on about one of us staying home, but that opportunity cost is just pushed on the other person. Why should I get to stay home and he have to go to work? We can both work and both retire in half the time. That seemed fair to me and that is the path we are on. I enjoy living on a very small amount of money. I enjoy being debt free. I enjoy knowing that if we both lost our jobs and never found work again, we would be just fine. Financial independence is a wonderful feeling and it makes me happy.
 
#17 ·
Not much...monetarily. Choosing to stay at home and not work is not very lucrative. But it has increased the value of my time. If I put my kids in daycare and went back to work my income would increase A LOT (and also child care expenses) but would the value? I wouldn't trade money for time with my kids unless that money was the difference between eating or not.

My husband, on the other hand, takes calls all the frickin time on his days off. Always always picking up work. But how much he can make in an hour is WORTH his time. Example: he just had three days off. He took an hour out of his "time" to make some money. Also in that hour he also made a sale (very important for his job) and made a contact with a customer who may bring him more work and sales in the future. His time is worth it and people are willing to pay for it.
 
#18 ·
I can give you a perfect example of how people fail to value time.

I am a quilter. I machine piece and hand quilt the quilting.

The average top batting and backing of quality materials cost about $200
The quilt I am working on now will take me 120 HOURS to hand quilt @ lets say $8 an hour $960

Total cost $1160


People want me to make them a quilt and buy the materials for $100.

This is why I only make quilts as gifts to give freely and with a clear happy heart. If I was doing it for money at such a low price I would have resentments and anger I mean really, a YEAR of my life for $100?
 
#19 ·
This is why I only make quilts as gifts to give freely and with a clear happy heart. If I was doing it for money at such a low price I would have resentments and anger I mean really, a YEAR of my life for $100?
That's why I don't sell beadwork. People are so clueless or else they're just used to shopping at the dollar stores where everything is cheap.

I was once accosted by a tourist in our local grocery store. I was wearing a jean jacket with a beaded velvet bib I had made with a value of $500. This idiot offered me $50 for it. I was so stunned I couldn't even think of an answer. I just started laughing and walked away shaking my head. The look on her face was priceless. She just couldn't understand why I didn't jump all over her offer. Never mind that, for starters, a new jean jacket at that time cost $40 without the bib and beading. So basically she was offering me $10 for all the expensive beads, the expensive velvet, all the other materials, and hundreds of hours of labor. What the heck was she thinking?
 
#21 ·
I think that's the problem right there. Imports are cheap and people who don't do crafts don't know enough about the items to understand either the time it takes to do quality work, or they don't have enough knowledge to recognize or understand the difference. I also think the hobbyists devalue the whole market for those of us who approach it as a business and not something we do just to fill up our time.

My jean jacket wasn't for sale, so there was no point in talking about its value to the clueless tourist. It's doubtful she'd have believed me anyway.
 
#23 ·
Since you're basically asking how I decide if I'm going to do something, or if I'm going to pay someone else to do it, it's difficult to give an answer. So many things go into my decision.

Do I enjoy the work?
Will I learn something new?
Do I get to interact with someone else while I'm doing it?
Will I be able to take pride in this?
How much will I save?
How long will it take?
What do I have to put off until the task is complete?

I don't have a set value on my time, because it would be quite high. I'll make more money, I'll never make more time.
 
#25 ·
Unless there's unlimited paid overtime offered, my time outside work doesn't realistically have a dollar value. The decision whether to for instance mow the lawn myself or pay someone doesn't hang on how much my employer (if I had one) pays, it hangs one whether I want to mow or not and whether I can afford to pay someone.

For me there's a third factor. The older I get the more I'm willing to pay to avoid frustration and aggravation, regardless of how much or little time is involved. The other day I looked at Bible book covers. They mostly cost more than I wanted to pay. I looked at ideas on how to make one. They all looked like I would cuss a blue streak trying and failing to make one. So I'll just carry it like a regular book, thus avoiding spending money, spending time, and spending aggravation.
 
#26 ·
The third factor is really coming into play, for me, as I get older. I *could* do independent tax/accounting/consulting work but it would just make my neck and back hurt more than they already do plus put more deadline pressure on, so I don't even consider this as part of my opportunity cost in making these decisions. The biggest financial decision I've made (since I left private practice to teach) was giving up the administrative part of the job to just teach. The cost was money vs. health and health won out without one minute of hesitation.
 
#28 ·
Somewhat but their main focus is creating a comprehensive financial plan so outside research to back up their opinions is what drives the discussion threads. They're learning investing and estate planning as well as more basic things like preparing personal financial statements, evaluating health and life insurance needs, and budgeting. The age range is from high school kids to people in their 70s so the experience of the older ones does impact their opinions. It's great because many are willing to share what has and what has not worked for them. 25% take the course because it's required for a degree in accounting and the other 75% take it to gain knowledge. Right now I'm teaching two 7-week sections with 50 students in each. Class just started Monday and the first graded discussion is coming up. It involves looking at their finances from a global perspective and identifying the greatest barrier to achieving their financial goals. So if one of them said "affordable health care" they would have to thoroughly research health insurance plans and public policies. They would also have to compare and contrast our health care system with other countries and come up with a plan to overcome the barrier(s).
 
#30 ·
OP - Never really thought about it but my free time is getting more and more valuable, especially because I could use it to generate income. When I was young I held three jobs working my way through grad school. I am glad I did it because I could never do that at my age. My cost analysis would have to be measured by the happiness I derive from freedom FROM work. I don't make a ton of money but I have passed the US happiness mark of $75k and it is enough for me. My extra time is now being used for hobbies and things I enjoy. I have no doubt I will easily fill my 40 work hours with good things when I retire.
 
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