The Value You Put On Your Time
I’ve had a few jobs where I got paid by the hour, specifically when I was younger. I worked at a coffee shop, a summer camp, a movie theatre, a fast food restaurant, a video rental store. There were a few others for a summer here or a weekend there. It was certainly important to me what my hourly rate was. Though my pay almost always started close to or at minimum wage. Going from $8.35 to $8.75 an hour was a huge accomplishment. That meant my time was worth more, a whole forty cents more every hour than it was before. Something happened as I got older though – time has become a very valuable commodity. My personal hourly wage has gone up.
A Younger Perspective
Thinking about myself as a young lad – I had plenty of time and not much money. There was time for school of course, and I kept a part-time job since I was seven but even with studying I still had plenty of hours every week to essentially play. September through to June I had at least a couple of hours every day that I could play street hockey, read a book, watch a TV show – do anything I wanted. June through August was even a crazier concept – I don’t recall ever being busy. This was the point in my life where my personal hourly wage was at its lowest. I didn’t pay attention to how long something was going to take, what I would make for it, and certainly not what I would save.
I Got A Raise!
Something happened as I got older. Not old like I am now – but mid-late teens. With less free time I started to put a much higher value on my time. I started to think of things in terms of dollars and cents in relation to days and hours. I would gladly spend a bit more money for the convenience of something – not having to wait in a line or do lots of research ahead of time. It didn’t even cross my mind that I could get the same result for less money if I just put in effort because effort was time – and I didn’t have as much of that any more.
This wasn’t the best way to live – it was fun and relatively stress-free but not the best. The reason for that is that even though I was low on time, I wasn’t swimming in extra money. I worked hard enough to get what I needed and even quite of a few of the things I wanted, but I was falling into the trap of convenience. I wouldn’t be caught dead with coupons or trying to price-match something. Not because I didn’t think it would save me money but because I felt my time was more valuable than the savings. Let me show you the math.
Let’s say I’m at the store, and I can price-match something and save $0.25 on it but it would add 5 minutes to the process of shopping.
$0.25/5 minutes = $3.00/hour
At the time that I started to think this way I think I was making around $13.00/hour.
$3.00/hour < $13.00/hour therefore it wasn’t worth my time.
For my five minute investment I would need to save over a dollar for it to be worth it.
It was the start of a path that would lead me into debt in a serious way. As valuable as time was, I had to start putting a higher value on money.
Demoted and it Feels so Good (ooo-ee-ooo-ee-ooo)
As a full on adult I started having to find a balance between what my time was worth, and what my money was worth. My actual hourly rate had converted to salary, I was making more but money was still finite. I have bills to pay, responsibilities and future plans. If I kept linking my personal hourly wage to my actual paycheque I’d end up paying people to do everything for me because the math would work out. I’d shop at one store, whichever store had everything I wanted because that would be faster regardless of the costs. This isn’t my reality though. I’m making more at my job now than I ever had in the past, but my personal hourly wage has decreased. I stopped thinking about the inconvenience or extra effort it takes to save, and started taking pride in finding ways to save extra money. My personal hourly wage has gone down and I’ve never been so happy to take a pay cut.
Finding Your Personal Hourly Rate Floor
Even though saving money is extremely important, you still need to find your limit in terms of how much time and effort you are willing to put in for the extra money. This is largely to do with your circumstances of course. If you are hard up for money, you need to have a lower floor in terms of what you are willing to do scrape by a few extra dollars. That 5 minutes to save a quarter every week adds up to real dollars that go back into your budget for things that are more important than your 5 minutes. But spending an extra hour to save $0.25 is probably not worth it.
When It Makes Sense
You also need to know when it makes sense to spend the time. Gas stations are a great example of this. I see people lined up by the dozens at the station that has gas a few cents cheaper than the competition down the street. Cars with 50L tanks that wait in line for half an hour to save $0.02/L. Not only is there personal hourly rate down to $2/hour – but they are using extra gas to save money on gas.
The most important thing to remember regardless of what value you put on your time, is to be mindful of both time and money. Both are finite, and I would argue your time is the most valuable asset you have since it is the only thing that can’t be replenished.
Have you ever thought about your time in terms of your hourly rate?
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