Many decisions we are faced with will be a decision between more money or more time. Should I move closer to work or commute two hours a day? Should I buy a new vehicle or keep my old one that needs constant maintenance? Should I hire a plumber or do my own plumbing? Learning to value your time and your money appropriately will allow you to face these decisions with great confidence. So what is your time worth?
What Is Your Money Worth?
Most people are able to put a price on their money, mostly because the world already does it for them. A dollar is a dollar; there’s not much arguing that.
But what else is it worth?
Money
That’s right, your money is worth money. What does that even mean?
Money Saves Money
When you spend money on hiring professionals, you typically will receive a service greater than what you can accomplish on your own. Hiring the correct professional determines the quality of course, but that’s another issue entirely.
Let’s take my line of work, for example. I am all for people using online software to file their own taxes or do their own bookkeeping. However, when you have a complicated situation going on from a tax perspective, or you don’t have a clue how to do bookkeeping, then you are just going to create a bigger mess for someone to clean up later.
There are countless times it would have been cheaper for my clients to just let me do the work from the beginning, rather than create a toxic mess that takes two or three times the amount of time and effort. Worse yet, they do it wrong entirely and no one realizes it until it is too late to correct it.
This concept does not just apply to accounting of course. When you pay someone to do something, the expectation is that it will be more correct, long lasting, and durable than you could do yourself. This will save you money in the long run as there will be no need for corrections, it will last longer, and it will handle more stress you put it through.
Money Makes Money
When you spend money rather than do things yourself, you can actually make more money.
Going back to my personal examples, the US tax code is intentionally overcomplicated. Trying to navigate it on your own will likely cost you in the long run, especially when looking ahead. By using years of experience and expertise, I have been able to help clients make decisions ahead of time to maximize their long term value as individuals and businesses.
People who spend years working and honing their craft tend to be able to perform at a higher quality than a DIY project. If you run a business, how will your customers view a professionally made logo versus one you throw together by yourself? How about when selling your home, do you know all the ins and outs of listing, staging, marketing? An agent will likely help you to sell for more than you realized you could get.
Time
Your money is also worth time. This should be a little more intuitive.
Money Saves Time
When you spend money, you save time. This is not just the idea that by paying someone to do something, you do not have to do it. This is more about how a project might take you three hours but a professional can do it in one.
By enlisting the help of others, you can save valuable time to do more important things.
Money Makes Time
Spending money can also make time. How is this possible you might ask?
Remember the concept above about how a professional will be able to do things better than you or I can? Let’s take a backyard fence for example. If I were to go outside and build my own fence, I am fairly confident I will inevitably be back out there fixing a board that fell off, or a post that was not anchored properly. All in all, I am creating more of a mess for myself later own, taking time that I should not be devoting to the project in the first place if it was done correctly.
When you pay someone to do something, you are also paying them to avoid this potential mess.
What Is Your Time Worth?
Let’s take this in the opposite direction. What and how much is your time worth?
Money
As the saying goes, “time is money.” Your employer, or you if you’re self employed, puts a price on your time so that is a good place to start. When you spend time doing something or working on a project, is it worth this hourly rate? Better yet, since you’re doing this work on your off time, you should actually value your time at an overtime rate!
I tend to look at tasks in this way: if it is something I will enjoy doing and it will not take an exorbitant amount of time, then I will treat it as a leisure activity. If I would rather not be doing it, then I whip out the calculator and get some quotes from the pros. If I can do the task within a reasonable amount of time and the price to pay someone else to do it is fairly high compared to the time, I’ll suck it up and do it myself. Otherwise, I am outsourcing the labor.
Happiness
Having more time tends to bring you more happiness. I can name a handful of people who have too much time on their hands and seem to be pretty miserable, but in general you will be happier with more time than with less.
If you are fairly overworked day to day, or your workload comes in cycles, then you should consider changing things up. I have specifically built in a minimum of two hours every day to devote to family time, with absolutely no compromises. Money comes and goes, but once you have spent all your time it is gone. Make sure every hour of your day is working towards something that will make you happy, short term and long term.
What Are You Worth?
Some of us might enjoy getting our hands dirty, whereas others might want to leave difficult tasks to the experts. No matter what you decide, you must understand what it is costing you. At the end of the day, each of us must decide what our time, effort, and money is worth.
So what are you worth?
