How Much Time Is It Worth?

Time is money, goes the saying. Too often though, we don’t think of the reverse as being true as well. But of course it is, because we give up our time to earn money.

One way to put the value of your time in perspective — and to get a feel for what’s important to you — is to calculate how much of your time you have to give up in order to buy something.

To figure that out, start by determining your take home pay per paycheck. Next, see how many hours you work during those two weeks, including your commute time, in order to earn that money. Then divide the amount you take home by the number of hours to find your hourly dollar amount.

For example, if you bring home $1384 every two weeks and normally spend 50 hours a week working including your commute, $1384 divided by 100 gives you $13.84 per hour.

That means that every $13.84 you spend is costing you an hour of your time.

At that rate, if a meal out costs you $30 including tip, then you’re working a little over 2 hours of work to pay for that meal. That might not seem too bad, because the work you do is distanced from the money you spend on the meal, but what if it wasn’t?

If you had to go work those two+ hours immediately before you could go out to eat, would it still seem worthwhile to you?

It’s worth giving some thought to, and adjusting accordingly.

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4 comments

  • Joel

    Interesting perspective. For me though, the question “how much time do I give up to buy something?” presupposes that we only work for money just to buy things. I don’t believe that’s entirely true. I intentionally sought out a job that I love, or rather my calling, and worked out how I could be paid for doing it.

    I’m thankfully in that position now so I don’t see myself as giving up any time when I earn my salary. Rather, I get paid to do what I love and then get to spend that money (responsibly of course) doing those things I also enjoy. It’s a win-win situation.

    Understandably, not everyone is in the same position. I would therefore say that we must first make sure we’re spending our time doing what we’re meant to be doing and then make the most of the fruit of that labour.

    • That’s great that you knew what your calling was and are working in it. As you mentioned though, not everyone does that (or necessarily has a calling, for that matter.) That doesn’t mean the only option is to do work you hate, but I think it does mean that you can’t go wrong with making sure you spend on things that are worthwhile to you.

  • Everyone should calculate this because it would lead to people probably saving more money. Especially when you use cash you really see how much money you can spend on things without really considering how much it is really worth to you in terms of your time. I think using cash as much as possibly is insurance you won’t overspend and can give you a clearer picture of what your time is worth.

    • At the very least, calculating the value of your time can cause you to stop and think about what matters to you before you spend.