How Much Is Your Time Worth - Revisited

Back in February I wrote a post titled “How Much Is Your Time Worth?” where I introduced a little MSN web app that calculated your take-home-pay per hour. What this handy number was supposed to do was give you an idea of how much your time was worth given a lot of assumptions, such as the alternative to doing a task was to actually work and be paid for it (not something that’s always possible, especially if you’re trying to get out of doing laundry at 10PM when you’re not self-employed). It appears that Yahoo! Finance columnist Laura Rowley has something to say on the same subject.

The interesting and critically stimulating part of her article begins at the end of the first page when she quotes a economics and psychology professor at Carnegie Mellon University, George Loewenstein, “I’ve always thought that if you had a little meter in your forehead that indicated how you value your time at any given moment it would be pretty shocking… People are often powerfully affected by the superficial features of situations.”

• Thinking in percentages: You’re willing to spend half an hour to save $5 on a $15 DVD but not $5 on a $200 DVD player because of percentages - but you’re still only saving $5. If you value your time at more than $10, this doesn’t have economic value. With the price of gas these days, driving somewhere else could cost you $5!
• Moral outrage: The desire to right an injustice trumps all concepts of time value and sometimes it’s about the principle of the matter. I get suckered into this all the time and usually it’s with a cell phone company.
• Procrastination: They list not joining a 401(k) as an example and I think of the three, if you were to tackle this one and not let it be what held you back, you’d be so far along in the game that the other don’t matter. Sign up for a 401(k) and get that free employer-match money!