A while back I discovered the comic strip XKCD. I love it because it makes me feel smart, especially when I laugh and share it with others and they just give me a blank stare. If you have not seen the site, be careful. The disclaimer at the bottom of the page says, “Warning: this comic occasionally contains strong language (which may be unsuitable for children), unusual humor (which may be unsuitable for adults), and advanced mathematics (which may be unsuitable for liberal-arts majors).” That said, there are often little tidbits on the site that spark my interest and get me thinking. Such as this comic:
Too often people get caught up in saving money, or earning more money, and they forget that their time has value. They see it as they saved some money so it must be worth it. If you can save a few bucks, but it costs you half an hour of time, is it really worthwhile? There are three different viewpoints on the matter.
My Time is worth $X
Many people will put a dollar amount on the time they have. Let’s suppose that they can earn $30 per hour by freelancing, so they decide that if they are not saving as much as that doing it themselves, then it is not worth their time. For instance: these are the types that could very well mow their own lawn, but since it would take them 1 hour to do it, and the neighbor boy will mow it for $20, they hire out. In the end they are $10 ahead by spending their time elsewhere. Those who structure their life this way often have a very distinct personality, and they carefully weigh the pros and cons of every financial decision.
My time is worth $X but
There are other people who will put a value on their time; however, they do not have enough work to keep themselves busy. So while they may say that their time is worth $30 per hour, they only have enough work to keep them busy for 10 hours this week. Rather than pay the neighbor $20 to mow the lawn while they watch TV, they will do the chore themselves. In the end, they are $20 ahead by mowing their own lawn. Those who structure their life in this way are often not as ambitious toward work as the previous group. They do weigh the pros and cons; however, they also value their “me” time highly. They choose not to fill every minute of the day with work.
Too many people fall into this category. These are the people that will save a buck regardless of how long it takes them to do so. The world is filled with those who are willing to work for so little. Just take a look at the websites like Elance, Mturk, and Odesk. Many jobs there pay less than minimum wage, and people are so eager to make extra money they do not mind. These are the same people that will drive 9 minutes out of their way to save $1 on gas, valuing their time at $6.66 per hour. Those that fall into this category are often scraping by and living paycheck to paycheck. They do not manage their money very well, and they jump at the chance to make or save very little.
Personally, I fall into the second category. I have a value on my time; actually, I have two values. One value is for my working time. I have a minimum and I won’t accept a job that pays less than a certain amount per hour. The other value is how much it would cost to give up my “me/family” time. My “me/family” time is very expensive, and is the reason I choose to only work part-time and stay home with my son the majority of the week.
In order to get the most value for your time, make sure you put a value on your time. By the way, if some of this sounds familiar, I touched on it in my “When to DIY, and When to Hire Out” article.
Have you determined your minimum wage yet?
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