What is the value of your time?
- Athma
- Mar 28
- 2 min read
We've all searched for cheap flights with long or multiple layovers, hoping to save a couple of hundred dollars. We endure the discomfort of extended travel because it seems to be worth the money saved. However, in the corporate world, where vacations are typically limited to around 20 days a year, does this approach truly make sense? I'm not just talking about flights; I'm referring to the tendency to hunt for discounts, ultimately trading our valuable time for a few extra bucks. Let's dive deeper...
Why do we do this?
As always, let's first address "why" [Remember, why asking WHY matters?]
I bring back a 2X2 matrix (sorry, spent too much time with consultants!) with Income on the horizontal axis and happiness on the vertical axis.
We tend to believe that more money = more happiness. Hence, the more we save, the happier we'll be. Seems like a logical argument. However, research shows that while income growth does increase happiness, it does so only until your physiological needs are met (see the outcome of the research in the image above and Maslow's hierarchy in the image below)
How do we measure the value of our time?
I invite you to run this math [sorry, I can't live without numbers :-( ]
Value of time = Take Home Income (after taxes) / Number of hours spent earning it
Let's make a simplified assumption for the denominator. Say, you work 40 hours a week and spend 10 hours a week commuting to work - let's approximate the full year at 50 weeks X 50 hours per week = 2500 hours.
Now, let me run a sensitivity on take-home incomes
Reflect on the scale above and ask yourself the following questions:
Does spending an extra 4 hours on transit make sense?
Is it worth travelling an hour to save a hundred dollars?
Does spending time searching for coupons justify the savings you receive?
What activities give you joy? How can you use the time saved for those activities?
Hope this helps you with a new perspective on Time.
Coach Athma
Toronto, Canada
