What is the Value of Your Time?

Time is money.

Yes, it’s a cliché. But, like most clichés, the words hold truth.

For busy entrepreneurs, time management can make or break your business. Spend your time effectively and you can create huge success. Spend it carelessly, though, and you may find yourself on a path to nowhere.

This dilemma raises a critical question–what is the best use of your time?

Whether you’re an entrepreneur, a mompreneur, or working 9 to 5, time versus money is a delicate balance. And it’s inherent in many of the choices we make every single day.

Unless you know the true value of your time, you can’t make informed decisions. This time value is different for everyone.

Are you thinking about hiring a virtual assistant? Wondering whether a cleaning or laundry service is worth paying for? Are you unsure what tasks to outsource?

Know what your time is worth so you can choose wisely.

First things first, though. We have to address the elephant in the room.

Time, like money, is a finite resource. Most business-minded folks like you and me already know how to save and budget their money. But we need to apply that frugal mindset to time as well.

Think about it: how many hours are you willing to pour into a task that you could outsource? How often do you go out of your way to save a buck, only to cause more work for yourself?

Until we are willing to recognize that our time is precious and limited, we will continue to squander it.

Eric Barker of Barking Up the Wrong Tree is spot on with this sentiment:

“Plain and simple, you need to treat your time more like money. Be more miserly with hours than dollars. Why? You can get more money in this life. You can’t get more time.”

You with me? Good. Now that we’ve gotten that straight, let’s get into how to calculate the value of your time.

There are a couple ways to determine what your time is worth. One is a straightforward calculation. The other is a tool that accounts for your mindset about the value of time versus money.

Let’s start with the simple method.

We determine the value of your time using 1) how much money you make (net), and 2) how many hours you spend working. Easy enough, right?

First, figure out how much money you make, after taxes, in a given week or month. If you work a normal 9 to 5, use a typical pay period to keep it simple. If you work freelance or run a business, you may want to use a longer period of time. This will account for fluctuations in pay and find an average rate over time.

Next, track the number of hours you spend actually working in that same amount of time. Again, if you work a job with set hours this should be easy. If your hours vary week to week, track your work time either by hand or use a time tracking app. (For a list of app suggestions, check out this article from Entrepreneur: 8 Great Time-Tracking Apps for Freelancers.)

Once you’ve determined your pay and your hours worked, the value of your time is:

$ Paid / # Hours Worked = Time Value ($/hour)

If you work 40 hours a week and your net pay is $1,000 each week, your time value is $25/hour.

Simple? Yes. But this method only accounts for what you actually get paid right now. That’s why I prefer a different approach.

The Time Value Calculator

Another technique to calculate how much your time is worth comes from the folks at ClearerThinking.org. Their time value calculator asks you a series of questions to gauge how much money you currently make as well as how much you value your free time.

You can find it here: ClearerThinking.org’s Value Of Time Calculator.

Their quiz takes mindset into account when calculating the value of your time. Your personal opinion matters in the time versus money equation. Now that’s powerful stuff!

You’re likely to get different outcomes from these two methods. You can decide which result you prefer.

How does this help?

So what insight do we gain from this exercise? What does our hourly time value mean and how can we use it to our advantage?

Think of your hourly time value as a tipping point on a scale. Say you calculate your time to be worth $50/hour. That means you should be more willing to outsource an hour-long task if you’ll pay less than $50.00 for someone else to do it.

Let me give you an example.

Imagine you’re trying to determine whether to use a wash and fold service to do your regular household laundry. Let’s say you spend three hours a week washing, drying, and folding. You’ve calculated your time to be worth $50/hour. So it’s “cheaper” to use the wash and fold service if it will cost you less than $150/week.

Don’t get me wrong. I’m not telling you to outsource everything in your life that is worth less than the value of your time. I said you should be more willing to outsource those things.

Again, time versus money is a delicate balance. There are times when spending doesn’t make sense.

And there are some activities that you may enjoy and want to do yourself. Me? I’m that strange person who actually likes doing laundry. Call me crazy.

Knowledge is power.

The real takeaway from this exercise is to understand the value of your time to be able to use it effectively. Without this knowledge, there’s no way you can know how your time is best spent.

Empower yourself with an awareness of your time’s worth. It will help guide your decisions down the path toward success.

Get To Know Our Guest Blogger

Tina Curry-Logan is passionate about all things personal growth and self-development. Her website, Self-Worthy.net, is committed wholeheartedly to the belief that each of us has the potential to find contentment in our own lives. Through Self-Worthy, she helps people manage stress, find joy, and live fully.

Want to join Tina and learn how to find meaning in your everyday life?

Learn more about Self-Worthy at: www.self-worthy.net

Join the Self-Worthy Community on Facebook: www.facebook.com/selfworthycommunity/

Get To Know Our Guest Blogger

Tina Curry-Logan is passionate about all things personal growth and self-development. Her website, Self-Worthy.net, is committed wholeheartedly to the belief that each of us has the potential to find contentment in our own lives. Through Self-Worthy, she helps people manage stress, find joy, and live fully.

Want to join Tina and learn how to find meaning in your everyday life?

Learn more about Self-Worthy at: www.self-worthy.net

Join the Self-Worthy Community on Facebook: www.facebook.com/selfworthycommunity/

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