The Value of Time. Can It Be Calculated by Money?

the value of your time

Imagine your faucet tap was leaking…

faucet tap

First of all, the sounds of the dripping water were extremely annoying…”drip, drip, drip” … It’s one hundred percent that you will find the way to stop that annoyance to avoid getting insane about it.

Secondly, your money is paid for that dripping water, which means you’re throwing your money away. You don’t ever like to waste your money, so you surely don’t want to waste water.

Now let me ask you a question: How long would it take you to fix that leak?  A day? Until the water is spilled out of the sink? Or until you’re floating in your house? You will act quick the when you realize the value of acting quickly.

By taking a prompt action, you save water, a precious resource, you save your money, and finally, you save your sanity.

Perhaps you have not realized, you are leaking as well. But instead of leaking water, your leaks are time leaks.  Precious time is being wasted and that is costing you.

Distractions – Productivity Killers

There are tons of “Productivity Killers”. Top 2 distractions turned out to be Mobile Phone and Internet.

According to a study published in Journal of Media Education, 97% of college students get distracted by phones in the class. As the results, they have no idea of what should be learned in that lesson, when answering to the interview.

And, do you get sucked into what I call the Internet Matrix? Here is how it goes. Starting with good intention to search information for your study and work, but then you click another link to another source of information. “Oh! This movie is great. I’ll watch it just for 15 minutes”. Does this sound familiar?

By the time you realize it, a couple of hours have escaped.

Do you often use Facebook or Twitter? How much time do you spend on these unrealistic worlds? Once getting bored of work, turn on the phone, keep scrolling news feed, and the time spent on it was more than the working time. Well! You’re not the only one to admit it.

Are you getting the point? If not, let’s converse the time leak into money.

A study performed by Brother, Inc. showed that on average, people waste nine minutes a day looking for paper. So about 1 hour is wasted a week (7 days). Assuming that a year has 50 weeks and the average billable rate is $100 per hour, that’s $5,000 you have wasted. And it’s just the payment for one of your time leaks.

No one wishes to spend an hour a week looking for misplaced paper and waste $5,000 just for nothing.  Your time makes your money.

How much is your time really worth?

how much dose your time really worth?

The Time vs. Money Dilemma

I guess that you have questioned yourself such question: What is my time really worth?

And talking about “worthiness”, I assume that the first thing that comes to your mind is money.

We make choices every day, but most of us base our decisions on our gut feeling, without calculating what our time is actually worth. For example, if someone offers to pay you $1 for one hour of work, you would immediately decline. Meanwhile, if someone offers to pay you $1000 for one hour of work, you would immediately accept. Every hour has a value, but rarely anyone can tell what the exact number is.

On extreme ends of the spectrum, it is easy to know if a task is worth your time. As you move toward the middle of the time-value spectrum, however, it becomes less clear if a particular task is worth your time or not. And this is the problem: most of life is lived in the gray zone of the time-value spectrumJames Clear

For example,
Should you go to the store to buy kinds of stuff in person or calling the shipping agent and pay $10 to spend time on more profitable task? Or pay extra $10 to have a good seat at the cinema? Or spend this week working with a customer that will pay you $2,000 immediately or take a shot at a business thought that could generate $20,000 throughout the following year?

Realized income method

The method to calculate the value of time in relation to money is simple. As a productivity addict, you may have read this Realized income method in James Clear Blog.

Step 1: Track your time by tasks. There are many tools that can help such as RescueTime

Step 2: Know how much money you earned during the time you spent working.

Step 3: Divide your total money earned (Step 2) by your total time spent (Step 1).

Does this calculation correctly reflect the value of time? Hm… Not really.

However… the value of time even goes beyond money

Why? The answers are simple. And there are many of those answers.

You can use time to make money. But you can not use money to buy more time. There is money market while there is no time market. There’s no way for you to buy an extra hour a day. You can have money again by working but cannot bring back the time, as you are just able to turn 30 while getting back to 20 is impossible, except…in movies such as: “20 again”, “17 again”. Well, you’d better not believe in those movies.

Another significant reason why time is more valuable than money is that time brings more happiness than money. A study in Social Psychological and Personality Science claimed that people who see time as more valuable than money were happier.

In a series of six studies, the researchers asked more than 4,600 participants whether they would prefer to pay more rent for an apartment with a short commute or a pay less rent for an apartment with a long commute. More than half of participants said they would pay more rent and save time. And overall those who valued their time over money were happier than those who said making money was more important than their time.

It appears that people have a stable preference for valuing their time over making more money, and prioritizing time is associated with greater happinessAshley Whillans, Lead researcher

You all might have met the kind of people, do a job regardless of salary just because it’s their passion. It is the job that would stick with them in a major period of their life. And after all,  everyone pursuit happiness in doing their job.

How to make the most of your time

People often say that: I don’t have time to ______? Fill in the blank, you may have thousands of answers. Do exercises, do projects, clean house, make dinner, build a startup, practice journal.

Do successful people have more time than you do? No. Everyone has equally 24 hours a day to do what important to them. The key is to make the most of that 24-hour, which means to seal these water leak as stated in the first part.

Now, forget about these articles with the headlines like “ 10 things successful people do to maximize their time” or “10 tips to get an extra hour in a day”. Remember we’ve just discussed distractions as productivity killers? You will be easily mixed up and distracted when trying to apply all of those 10 things at the same time. Always get focused, on your priority.

The key to time management is treating out the priority in equivalent to broken water heaterLaura Vanderkam

Our case – the dripping water tap, is somehow similar. You don’t want to be floating in your house, you don’t want to waste water, you don’t want to waste your money. So you fix the tap immediately. You will act quick the when you realize the value of acting quickly.

So how do we do that?

First, make a list. Write down everything that needs to get done that day. Once you have everything down, separate the items into urgent vs. non-urgent to determine the top priorities for that day. A really good time to do this is on Friday afternoon which economists consider to be a “low opportunity cost” time. Then, assess the value. Completing certain tasks will offer more benefit than others.

It’s crucial to be honest and flexible. When creating your list of priorities, be realistic about your bandwidth. Setting unattainable goals will only cause disappointment down the road. On the other hand, to be able to effectively prioritize, you must be able to deal with changing priorities. Take them as they come and decide if they are urgent or not.

Your time is not money, it means even more. Being productive is not about being busy. It’s about doing the right things effectively. You have 24 hours a day, 168 hours a week. If these number is deducted by 56 hours of sleep and 40 hours of full-time work, you still have 72 hours to do what matters to you.

And once you are focused on what matters to you, you can build the life you’ve ever wanted.

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