Time is Money

At some point since arriving at college, when I was trying to decide whether something was worth the time, I started quantifying it in term of money (examples follow). This worked pretty well for me: money is easy to quantify, and the thought of spending money is something I’m naturally averse to.

The most noticeable effect was that it made me a lot more conscious of wasted time.

Roughly, I estimate that my time is worth about $30 an hour to me — I can get a $20/hour job without too much trouble, but I imagine that there would be things I’d rather do than a $20/hour job. And time is worth strictly more than the earned money — time cannot be saved, stored, or earned back.

With this figure, I got some pretty interesting translations:

  • “I was on Facebook for two hours today” is “I paid $60 to read my Facebook news feed”.
  • “I slept in until 1PM today” is “I paid $150 to avoid getting out of bed” (assuming one can wake up at 8AM and still function).
  • “I spent all of today procrastinating on work” is “I just wasted $300” (10 waking hours).

Things on the left side are things I overhear all the time at lunch in the freshman dining hall. I’ll bet the right side is something that no one would feel comfortable saying. We’re so used to spending time we forget how valuable it is!

And people think I’m weird for waking up early. Who wouldn’t wake up an extra couple hours early if they got paid $60 to do so? Or more negatively: would you still press snooze if it cost $60?

It’s even more fun to take this and scale up.

  • “I didn’t drop this class even though I didn’t like it” is “I passed up a refund for a $5,000 item I didn’t like”.
  • “I’m not sure what I got out of my last year at college” is “I bought a $100,000 item but I’m not sure what it was”.

Money is remarkably good at putting things in perspective.

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7 thoughts on “Time is Money

  1. While the high price of time you quote is no doubt good for motivating people for using it more wisely (and so I’m tempted not to make a counterargument), I think your figure is a bit high because time is an illiquid asset. If I suddenly have a few spare hours in my schedule tomorrow, I can’t find somebody to pay me $20 per hour to work for them for those few hours only. (This might not be a problem for you if you have personal projects that you can work on at any time and expect to eventually profit off. Maybe I should find one…) Your figure might be a good benchmark for the scaled-up comparisons, though.

    Also, getting enough sleep is important — I’d say the marginal returns of sleep are still better than the alternatives for a while beyond the level where you can just manage to “function”.

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    • (Confession/disclaimer/introspective footnote: I’m motivated to rationalize in this direction because I’m pretty sure my current state of mostly cooking for myself, as opposed to ordering food, eating out, or having a meal plan, is also trading time for money at a rate less than or comparable to minimum wage. But it’s still true that if I consider ordering out instead of cooking and thereby freeing up about an hour, I have no idea what to do with that hour to recoup my costs.)

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    • Sure, I definitely agree that it’s not exactly right to take the rate of pay as the rate of time. But with that being said, I might note that the personal number I now use has increased significantly since then.

      And yeah, sleep is pretty valuable, I agree. Mainly I was addressing the common phenomenon of people sleeping in until noon just because they can. (It’s also interesting that you bring up the meal plan; I was thinking about that too, and I think the effect for me is that I’m much more willing to order out than I have been in the past.)

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  2. Pingback: Careless Money Habits | Dreams of Escape

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