Passionate Pursuit of Purpose

What is an hour of you time worth?

Posted by on Nov 4, 2013 in Character Development, Leadership, Personal Finance | 4 comments

 

Do you know what happened to your 168 hours last week

Do you know what happened to your 168 hours last week

If you had one hour to live; how much would you pay for another hour? 

This is a continuation of a previous  article “Are Money and Time equal.”  I am painfully aware that I am not using my time as wisely as I could.  I hope this exploration will encourage you and me to value our time properly.

Generally humans are terrible assessors of risk. (Ways we get the odds wrong).  In the same way most of us are terrible at valuing our time.   We think we save money by “doing it ourselves.”  Often we end up paying ourselves a slave wage to save that money.

I used to change my own oil.  I used a Motorcraft filter and Motorcraft synthetic blend motor oil.  I would go to the store pick up the oil, travel to my father’s, get his tools out, and change the oil.  It cost me $28-$34 in materials, plus my time, and my mileage.  The whole process took about 2 hours.

My office is next door to a Ford Dealership.  During tax season, I had them change the oil for me.  They walked to my office picked up the vehicle.  They used the same materials I did.  They charge me $33 to $37 to change the oil.

So how much was I paying myself to change my oil?  I was paid somewhere between $0.00 and $9 for 2 hours of my time.

At best that is $4.50 per hour.

It is easy to value time in that example, but how valuable is an hour with your wife?  Children? Or others you care about?

There is a story about a little boy whose father worked very hard.  The father was always focused on making money.  The boy asked his father “How much do you make an hour?”  The father replies $50/hr.  The son goes into his room breaks into his piggy bank, seeing he only has $25 he asks his mom for $25.  At first she says no, but the boy keeps persisting until she relents.

With $50 in hand the boy goes to his father.  He then asks his father “Can I buy an hour of your time?  I have $50.”   The father is crushed.

The father realizes in that moment money and time are not equal.

You can never buy more time with the ones you love.  Those hours can’t be priced.  Yet, if all you did was spend time with them would you value that time at all?  We need balance!

We all have various areas of our life that require our time.  Are we budgeting our 168 hours each week in a way that reflects the importance of those areas in our life?

We often budget our money (which we can always get more money).  But do we budget our time?  Our time is a finite commodity.

What does your typical allocation of weekly hours look like?

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  • Robyn Smith

    Great food for thought, J.B. The phrase, “Time is money”, can certainly be deceiving. However, we use it to time’s advantage in teaching our children. When someone gets the “I wants” too much, we calculate how much time it would cost, based on a per hour pay scale, to pay for the desired item. Most often, the choice falls to forsaking the item rather than the time. That’s true value! Thanks for the article. 🙂

  • J.R. Woodrum

    When doing real estate I would track what my time was worth per hour, especially when working with buyers. For example, I would spend ten hours showing eight homes to a couple.They purchased a $150,000 home. A 3% buyer agents commission is $4,500.
    $4,500 divided by ten hours=$450 an hour.

    I had the mind set that my time was worth an average of $385 an hour when working with buyers. Therefore, if I spent five hours with a buyer and they didn’t purchase a home,
    it cost me $1,925! But more significant was the fact that instead of working with a
    weak buyer, I could have been spending that time with my wife or daughter. I had lost time that could never be replaced. Time with your children or family is priceless……. like the Mastercard commercial says.

    Figure out what your time is worth and you will be more effective managing your
    work and family time.

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  • Great article, J.B. I personally don’t see my time completely separated between family and work. I run a company from my home office with my wife as a partner. Our son is at school during the week, but when he isn’t he has a laptop that he can bring into the office/studio and “work” with us. If this wasn’t the case, I am sure I would see my time differently with a noticeable separation.

    • That is one of the key things that motivates so many Amish Children to remain Amish. They create businesses where their children work with them.

      Working together is a great way to build relationships, create memories, and get to know each other better. I love how you have created a lifestyle that allows you to mix family and business.