Time is Money: Assessing the Value of Your Time as an Investment
Updated: Oct 28, 2022
What is the worth of your time? As simple as it sounds, this is a hard question to answer. Most people don't understand the value of their time. Answers will vary depending on an individual, where they live, work, money they make, future goals, and much more.
All in all, time is a limited resource, and understanding its value can help you in numerous life and business decisions. It will help you manage it well and maximize productivity, so you can decide whether to do some tasks or delegate them.
I'm a pretty skilled gardener and love the idea of working in my garden while saving money simultaneously! When I moved into my Victorian house last year, the garden was overgrown and sparse. I had a lawn company come in and do all the initial work like weeding, trimming, mulching, and getting everything in order. However, when I got that bill, I was shocked by how expensive it was. So this year, I decided to save money by doing it myself instead of delegating the garden work - why not?
To start the garden project, I had to get the materials such as mulch and trees. It didn't cost me much to buy five bags of mulch and a few pine trees, and I was impressed by how much I saved by purchasing those items on my own. Secondly, I felt extra clever because I didn't need a landscape architect to come in, put together a fancy design and charge me all sorts of money, or the landscapers to plant the trees and lay the mulch. I'd do that myself and save the money that way.
Then, because I'm always considering the return on my investment, I started thinking about the return on my garden:
👉 Joy: I love spending the day in the garden while listening to music. It also allows me to be social with my neighbors, who stop and talk to me as they walk past. I also love being dirty, grounded, and in nature.
👉 Curb Appeal: The manicured garden added value to my house. It looks pretty with all the flowers surrounding it!
👉 Excellent Exercise: Working in the garden is an excellent workout. Between hauling bags of mulch and all the digging, I don't even need a gym membership.
👉 Monetary investment and time.
However, the cost of my garden is not only the cost of the materials. It is the materials plus the cost of my time. If I'm in the garden, I am not working on my business, reading my market news, or researching investments.
So, when thinking about do-it-yourself projects, it is crucial to calculate the value of your time. For instance, if your time is worth $50/hour, and you can hire someone at $10/hour to help you with a task, you are saving considerable money.
Here is the downside of my garden...
Before planting the trees I'd purchased, I had to pull out a considerable amount of Ivy before I could start digging holes. And guess what, there was poison ivy in there, and I got affected all over my arms. So after 9 hours of back-breaking labor, Jessica had an urgent care visit when everything was planted!
Between fighting Ivy, digging the hole, planting and mulching the tree, losing sleep, miserable itchiness, and an urgent care visit, followed by purchasing prescriptions, itch creams, allergy & cleaning products, I got a terrible return on my investment. Next time, I'll hire someone to weed and plant the tree 🤦♀️.
Soooooooo.... Maybe before doing a DIY project, think about your time as money... and next time, ask ... what is the return on this investment.
👇Share your thoughts in the comment section below 👇
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Disclaimer: Jessica Perrone is not a registered investment professional nor a financial advisor. This content is for educational purposes only and is not investment, tax, or financial advice. Always do your own research. You are solely responsible for all investment, tax, and financial decisions that you make. Please read the full disclaimer here.