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Time is NOT money–at least, not yours

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I’m tired of people saying “time is money.” No, it’s not–especially not yours.

“Time is money” is a great excuse we use to pay more than we should. We justify paying extra for things like 2-day shipping, 1-hour photos, and taking cabs when we should just walk.

Thinking our time is money is really popular in America. It’s also dumb. There’s a fatal flaw people make when they say this: It assumes you’re earning money ALL THE TIME. That simply isn’t true. If you say “it’s worth my time to pay $50 to have the flowers delivered,” you probably haven’t figured out exactly how much all your time is worth.

A good way of figuring this out is to actually calculate how much your paid time is worth. What do you make per week? Divide that by the number of hours you work and BAM, there’s the amount your paid time is worth. But then compare that to your total time in a week and see how the numbers come out. For example…

If you make $800/week (after taxes) and you work 40 hours per week, each paid hour is worth $20 to you. But factor in all the other hours you aren’t paid for (total weekly hours: 168), and you’ll see that $800/168 means each hour of the week is actually only worth about $4.75 to you.

2 things: When you factor in the realization that you’re not always working and being paid, your time isn’t really worth that much in financial terms. Second, $20 here and there starts to add up. As a college student or recent college grad, you have more time than money. Would you rather have something tangible like $20 in your pocket, or look back and say “Wow, it was worth it to have that extra 10 minutes?” Just think about how many Cups of Noodles you can get with $20!!

“But Ramit,” you might say, “I value my time over certain things! Why must you come down so hard on me?” Actually, I agree. I’d just rather have you save your money for really important things instead of 2-day shipping. So unless it’s an emergency or something significant, stop paying extra for stupid stuff. And please, stop saying your time is money.

With that said, there are some people whose time is worth more than money. Senior executives and anyone else who works more than 70 hours per week, I’m talking about you. These people literally don’t have any extra time so they have to pay to get normal things done (dishes washed, laundry done, groceries bought, etc) so they can spend time with their family. At that point, it’s a matter of priorities. Also, if you are really old, who knows what might happen tomorrow? I might just pay for someone to do my shopping and laundry if I were an 88-year old grandpa.

Now what?

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14 Comments on "Time is NOT money–at least, not yours"

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Adam
Adam
11 years 2 months ago
Your time is worth what you can sell it for, therefore if the only time you can possibly make money is during the normal 40 hour work week than possibly you are right. However, most people can, if they try find extra ways to sell there time. Like work overtime, or start home biz. I think that figuring out the aftertax rate at which you sell your time is an important part of bugeting. Why wash your car for an hour when you can pay some else to do it for a quater ofwhat you get paid an hour, unless… Read more »
Jerry Kindall
11 years 1 month ago
Nah, your time is worth what someone would have to pay you to give up doing what you want, and this goes up as your free time gets scarcer. But that’s a justification for charging other people for your time, not for paying stupid amounts of money to save a little of it when you can just as easily wait. I mean, it’s not as though a two-day shipping upgrade actually saves you time, because you’re not going to sit there waiting for whatever you ordered to arrive. At least I hope you’re not! On the other hand, spending a… Read more »
Jay
Jay
10 years 6 days ago

Actually, this phrase is one of the most important investment rules ever conceived. Warren Buffett lives by these words, and has ever since he began Berkshire. The words are not describing “earned income,” they are referring to the time-value of money…. the fact that getting a dollar today is worth more than getting a dollar one year from now. You should know why. It’s because you miss the compound interest of that lapsed time. And we all know that when computing compound interest, every penny, every day, and every percentage point count.

Tom
Tom
10 years 4 days ago
First off: Time is NOT money. Time is the MOST precious and valuable quality that you possess. You can replace money. Money may have some value…but over time it gets eaten away…by inflation…or by…how do the storehouses term it…hmmm…shrinkage. Maybe taxes or other circumstances beyond your control may destroy this resource. You can replace any thing that you have. Yes, even your relationships are replaceable although the investment of the TIME that you placed into them is not. Once time is gone…it is gone…forever. You cannot relive the past. You can never regain “lost” time…(However time is never really lost…it… Read more »
James
James
9 years 8 months ago

If I’m at home playing video games, and someone says, “Come mow my lawn”, I’ll say, “No thanks, time is money, I’d rather play video games than mow your lawn”. But if they offer me money making it worth my time, then I’ll do it.

So yeah, wouldn’t that imply that time is money?

Vincent Orlando
Vincent Orlando
9 years 6 months ago

Dividing your income by 168 hours doesn’t make any sense to determine your time value either, since whether you’re rich or poor you biologically need to sleep 6 – 9 hours every night. Why not round down to 100 (it’s easy division) and use that as the baseline? At $800/week (after taxes) that makes your time a more realistic $8 / hour rather than 4.75.

Christopher
Christopher
9 years 4 months ago

My boss and good friend told me that every thing is time OR money. If you don’t have the time to do something, you have to spend the money, or if you don’t have the money, you have to spend time.

Q
Q
8 years 11 months ago

You forgot considering that not every hour has the same “value”:

– I can not spread my tasks over the entire week as I wish (e.g. no one will go play basketball with me at 10pm on Saturday)
– I just don’t want to cook for hours after I skipped lunch to finish a project in time
– After giving a 4 hour presentation followed by a workshop I will not be in the mood to chat with friends

Great Blog by the way.

AM
AM
8 years 10 months ago
TIme = Money, still. I somewhat agree with you, however, time is not only valued in monetary terms, but in terms of opportunity costs. So, instead of doing this or that yourself, paying 10 bucks and getting it done, might be just worth it. Furthermore, having one hour more to do what you like cannot be valued in terms of what you usually make per hour on the basis of total weekly hours, because even if you should merely earn $5 per hour this way, you might be able to do extra work during this hour, getting paid overtime or… Read more »
Hasina
Hasina
8 years 10 months ago
I agree with the opportunity cost argument. Time is money in the sense that what could you be doing with that 2 – day air mail if you got it two days earlier? Would it mean a loss of money if you waited two weeks for it? Like, if it was a check or something? It depends also on the example you use. I think you incorrectly said that senior executives time is worth more than money. It’s just that their time is way higher in value, therefore, having someone who would do the dishes, laundry makes sense, because they… Read more »
Mike McDougal
Mike McDougal
8 years 4 months ago
For me, time and money are very closely related. I make about $55/hour. (Bonuses and things like that complicate it a bit, but that’s close.) I can work from home. There’s almost always work available. For me, it makes sense to pay people to do a lot of things. For instance, it makes no sense for me to do laundry. My condo doesn’t have a washer and dryer, so doing laundry wastes about an hour of my time. I can get the concierge to pick it up and have it done for $10 to $20 per week. I can’t do… Read more »
Nick Atnite
Nick Atnite
7 years 9 months ago

FYI – Your Cup o’ Noodles link is broken.

Jasmine
Jasmine
7 years 2 months ago

Easier than EBAY– try selling DVD’s or CD’s thru the company “SecondSpin.com”.
They re-sell, so don’t pay as much as a direct buyer might, BUT there’s no listng fee, no fee off the final sale, and no delay being paid.
All you have to do is enter the UPC code to see what they’ll pay and they cover your shipping cost (media mail rate).

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