by Kevin Sun
Have you ever wondered if something you did to save some money was worth the time you spent to do it? Maybe you travelled far out of your way to get a deal at a store, lose chunks of every day on public transit to cut car costs, or put countless hours into a DIY home renovation. Time is money, after all, but finding the right balance between the two can be tricky. Here’s how you can use both wisely:
Separate Work Time from Personal Time
If Joe’s $40k/year salary comes down to about $20/hour, then it’s easy to say that every hour of his time is worth $20. However, this isn’t quite accurate; after all, income is taxed, overtime pay exists, people get tired, and Joe may consider time with family invaluable compared to time at work.
The first step to actually deciding what your time is worth is to know the difference between work time and personal time. Work time is what you spend for your job and on side hustles. It’s also for chores that go with taking care of your household (e.g. cooking, cleaning, laundry, paying bills, taking your car in for service, etc.). Personal time is for you, whether that’s to indulge in hobbies, be with family, or do whatever else enriches your life. Figure out how much work time you’re willing to give every week; that’s the time you can attach a dollar amount to.
Decide What Your Work Time Is Worth
Deciding what your work time is worth is ultimately up to you. For example, let’s say Joe decides that every hour spent working after his regular job is worth $15. If he spends two hours looking for a good deal but only gets about a $20 discount, then he lost $10. On the other hand, if he decides to skip getting $50 of takeout this week and instead cooks those meals for $10 plus an hour of work, then he’ll come out ahead by $25 (and maybe make this a habit). There could even come a point where something considered work becomes a hobby and balances out with personal time.
Keep in mind that for this to make sense, Joe must use all of his work time for . . . you guessed it . . . work. If he saves two hours by not looking for a deal, then he has to use those hours for something else productive (like cooking) to get value out of his time. If he just browses Twitter instead, then that work time basically turned into personal time.
So when deciding whether doing something is worth your work time, think about what other thing you could do instead and whether that would give you a better return on your time investment. If there’s no other work to do, then decide if that time is worth spending for yourself instead.
When It Comes to Money, Your Budget Is Your Guide
While maximizing the value of your time is a great skill to have, your personal budget should always have the final say on your money. For most people who can’t just get paid working more on the fly, a budget gives you the power to make informed decisions about what’s worth and what’s not worth spending money on.
Let’s visit Joe one last time. Joe decides that spending an hour a week washing dishes isn’t worth it. The new dishwasher he wants costs $450, so with his $15/hour work time, he thinks he’ll get a return on his investment after 30 weeks (conveniently forgetting that dishwashers cost some time and definitely some money to use as well). However, there’s a problem: he doesn’t have $450 to spare as an irregular expense in his budget. He could use his credit card, but there are a lot of great reasons not to go into debt.
So what can he do? Well, remember that if Joe skips takeout and cooks more instead, he’ll save $25 a week. So if he decides to keep that up for 18 weeks, then he’ll have the $450 he needs right in his wallet. Sure, he’ll have to do a few more dishes until he can afford the dishwasher, but better times will come because he made a plan and took the steps needed to follow through with it.
Get Help to Make a Budget That Will Save Time and Money
Whatever your plan to save time and money is, remember the golden rule: it must work with your budget. If you’ve never made a budget before or want help with improving yours, then book a confidential appointment with a non-profit credit counselling organization. An hour spent with a professional credit counsellor could be all you need to start on the path towards achieving your money goals.