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What Valuing Your Time Is and Isn’t

Posted By Jim On 03/14/2012 @ 11:42 am In Personal Finance | 12 Comments

I saw a post on Lifehacker today that I had to share – stop trying to monetize your time [3]. The Lifehacker store points to a paper in the Journal of Experimental Social Psychology that says you have trouble relaxing when you consider your time off as money lost.

Personal finance bloggers often write about how you should value your time. If you make $15 an hour, then it makes sense to pay up to $30 more to save two hours. If a gallon of gasoline is five cents cheaper across town and you have a twelve gallon gas tank, you only save 60 cents in gasoline while spending an extra 15 minutes getting to and from the gas station. By having a good concept of the value of your time, you can make better decisions.

The risk in doing this is that if you start comparing your time off with your time working and seeing your time off as lost money, you will probably get anxious. The study showed that this was the case for participants in that study [4]. Specifically, leisure activities were not as leisurely in part because people were impatient when money was involved.

This reminded me of a conversation I had with my lovely wife the other day about leisure time and time value of money. Her phone’s microphone recently died and she had the option of driving thirty minutes to a repair shop or spending $4-5 mailing it to a repair shop. She was trying to decide whether or not to do it, thinking about how much she valued her time (certainly more than $5 an hour), when I said that work time and leisure time are different.

How much would someone have to pay me to sit in an office instead of spending it with my family? $30 an hour? $300? It’s much higher than my typical hourly wage in part because this is on top of a 40-hour work week. It’s going to be a lot. And that’s where the valuing of time is important and why having a value for your time can help you make decisions.

So while the lesson of the paper is that you should avoid the thinking that all your time is monetizable, I want to add that valuing your time is important for making decisions down the line.

Thoughts?

(Photo: fdecomite [5])


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[1] Tweet: http://twitter.com/share

[2] Email: mailto:?subject=http://www.bargaineering.com/articles/valuing-your-time.html

[3] stop trying to monetize your time: http://lifehacker.com/5893180/stop-monetizing-your-time-and-relax-better

[4] that study: http://www.sciencedirect.com/science/article/pii/S0022103111002897

[5] fdecomite: http://www.flickr.com/photos/fdecomite/406635986/sizes/s/in/photostream/

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