How much is my time worth?
How much is my time worth: a calculator
Time is the most precious commodity we have, but people waste it all the time because they don’t know its value. In an effort to fix that, I've created an interactive calculator that takes some plausible real-life situations where money is exchanged for time and interprets an hourly value based on your responses.
How much is your time worth? Go through the “How Much is My Time Worth Calculator” to see!
What's your average? Was it higher or lower than you expected? Do you feel like it's an accurate number? Whatever the number is, it's an important one to keep in mind as you choose how you make and spend your money.
Why do people waste time for money? Know how much your time is worth!
As you might expect, I follow a ton of personal finance bloggers on Twitter. I try to be pretty open minded with who I follow and what I read about. I follow hyper-frugal bloggers who live on $10,000 a year. There's a lot to learn from people who have found a way to live on almost nothing. Although I don't aspire to a hyper-frugal lifestyle, by following these people I have discovered ways to become more frugal while still living the way I want to.
At the same time, I follow bloggers who make over $500,000 a year, with the lifestyle to match. By learning from people who have become income machines, I can more effectively increase my own income. It's also a good reminder that more money isn't necessarily correlated with happiness (above a certain level).
Here's what I don't understand: many bloggers in the personal finance space fetishize tiny, insignificant side hustles and income. I have seen so many posts about "How I made/saved $10 on a Sunday afternoon by xyz". Unless it's a hobby that provides alternative value (like this blog), earning or saving such insignificant amounts of money will never have an appreciable impact on my finances. The way I see it, if I am going to spend time trying to earn or save money, it needs to pay out at least as much as my average hourly value of time. Everything else is a waste.
Now, before I am immolated by the leanFire community, allow me to make a couple of important clarifications. Obviously, charity is an exception to this. Give your time in whatever way makes sense to you. Hobbies with potential side income are also exempted - provided the value from the hobby along with the side income are equal to or greater than the value you place on your time. The other exception is for building something: I would gladly devote myself to a project that paid $0 per hour at the start, but could potentially lead to valuable income or (even better) passive income down the road.
What to do instead of wasting time for a little money
Now that I have diagnosed a sickness, I think it's only fair I provide some potential alternative activities that are highly correlated with increasing income and also happiness.
Read a book. Learning something transformative will always be more valuable than saving $5.
Build passive income. Start a blog, buy a fixer upper as a rental, or write an ebook.
Start a side hustle that you are passionate about. Like cars? Start a detail shop like my cousin. Love event planning? Offer to plan some of your friends weddings for free and parlay it into paid gigs. Just make sure you have a plan to clear more than your average time value.
Learn more about your profession. Go to conferences, meetups, or other activities that can help you elevate your game and snag that raise you deserve.
Go back to school. If you're not making as much as you could, and you don't see a way out, investing in a masters degree could pay off.
Know how much your time is worth
At the end of the day, everyone needs to know what they are worth. We only have so much time here, and we need to use it intelligently and purposefully. Instead of spending your time on projects or side hustles that yield a small amount, or trying to save a trivial amount of money, focus on the big levers: increase your knowledge or skill set, remove big costs from your budget, increase your income or start a side hustle.