What’s Your Time Worth?

Posted

time vs moneyIt’s been said that “time is money.”

We beg to differ. Time is much, much more valuable than money.

Unlike money, we can’t get time back (no refunds here for that 5-hour reality TV marathon). We are all given the same amount of it. And, here’s the biggest rub: we can’t beg, borrow or steal to get more of it.

Time is the ethereal gift, the universal equalizer. And to live a well-lived life, we should be as abundantly rich in minutes as we are in dollars, so that we have the freedom to spend our hours on what is truly valuable to us.

In the pursuit of financial security, though, sometimes we can lose sight of wasting our most precious commodity. We face the tradeoff between saving time versus money all the time: is it worthwhile to spend an hour surfing the internet for a discount code in order to save $10? How far should you drive to get a better rate on gas? Should you hire someone to clean your place, or do it yourself?

Use Our Calculator to Find Out

We created a handy calculator to estimate how much your hour is worth.

Keep in mind that this hourly value is just a useful guide to decision-making: it doesn’t reflect what you are worth as a person, and how much you earn is just the starting point.

Enter your after tax annual salary*:

How much extra income do you have after expenses?

It's tight
A lot! I'm good!

How much free time do you have?

A Lot
Barely Any

Is your priority cutting costs or saving time?

Save Time
Cut Costs

* For a rough estimate, multiply your gross annual salary by 0.75.

Tackle your finances with LearnVest.com

How Did You Get This Number?

If you don’t have a lot of disposable income, your time “value” goes down because you are better served saving money. If you have less time, your time value is higher than if you have a lot to spare. Finally, your current priorities matter. All these factors weigh into our algorithm. (These calculations are based on working a 40-hour week, 50 weeks a year. If your hours differ greatly and you would like us to crunch your hourly value, email us your stats).

Ways to Apply This…

Say that your free time is worth roughly $12 per hour: If that taxi ride will cost about $10 and save you an hour compared to taking the subway, then it might be the right call. If it’s going to cost you $20, maybe you should think again. Use this to help you figure out:

  • Whether you should order in or cook
  • Whether you should hire someone to clean, organize, fix things, or do it yourself
  • Whether time spent on the phone with customer service to save $X is worth it
  • Whether you should take the travel time to return something to the store
  • Whether money saved for a flight with a layover is worth the extra time traveling

This calculator is just a rough guide, so obviously your budget comes first–and the enjoyment you get from some of these activities (like cooking or DIY) should factor in. But it can be useful to start thinking of your time as the most precious commodity of all…and weighing it with as much value as you do your dollars.

  • http://twitter.com/alexavontobel alexavontobel

    I now have a GREAT excuse for why I won’t hold on calls with delta. it takes too much of my time!

  • http://twitter.com/alexavontobel alexavontobel

    I now have a GREAT excuse for why I won’t hold on calls with delta. it takes too much of my time!

    • Tina Koska

      Story of my life, with all this bad winter weather, I’ve spent so much time on hold with airlines. Grrr.

  • Theresa

    It’s good to know that I’ve been doing the things that work best for my time and my money. Love the calculator!

  • SoCalLawyer

    Painful to see that my hourly worth is $9.14 when I am billed out as a corporate attorney at $175 per hour. I think that means it’s time for a new job.

    • Sean

      $175 an hour, takes into account workers compensation, malpractice insurance, general liability insurance, directors and officers insurance, rent, utilities, statutory deductions, benefits such as medical, dental, vision, group term life, ad&d, etc. The median wage for lawyers in 2011 in NY was $62.95 per hour, benefit costs add another 20% on top and you have $75.54 per hour. That’s a 43% markup on cost. You are a cheap lawyer. Ones in NYC charge between $330 and $550 an hour.

  • http://twitter.com/brutalcupcake u10e6 Michelle Smith

    Heh, I’m worth $5.23 and I make $10 an hour…I don’t really understand what this means though, heh >__<;

    • http://twitter.com/amkade Allison Kade

      Hi Michelle,nnAll we mean by that is that $5ish is probably your “is it worth it” point. So, if you spend an hour surfing online to find a coupon in order to save $7, it’s probably a good choice for you. If you’re only going to save like $2 in the end, then your time is probably more valuable than that. Same follows for other similar activities. Hope that helps!nnAllisonnDeputy Editor @ LV

  • Pat Chiappa

    I’ve been calculating my ‘real hourly rate’ for years. The book “Your Money or Your Life” introduced me to the concept of how do I want to spend my ‘life energy’ back in 1992. It has become a lifelong habit to ask myself a couple of questions before making a purchase, “how much do I love this sweater – I have to work 5 hours for it – is it worth 5 hours of my life energy?” Sometimes it is, other times not – either way, knowing my real hourly rate and then asking these questions have kept me on track financially.

  • http://www.spiritusfinancial.com Pat Chiappa

    One more thing I forgot to add – don’t forget to re-calculate your real hourly rate if you change jobs or your salary changes. It seems obvious, but I’ve forgotten at times

    • http://twitter.com/amkade Allison Kade

      Thanks for your good advice, Pat!

  • Anonymous

    Ok, this calculation could make sense when it comes to commodity decisions such as whether to take a taxi or the bus. However, I think it’s a little different when it comes to online deal hunting. Sure, you spend hours and hours online and perhaps only save yourself $10-20 and you buy junk you don’t even need; but for many people it’s the journey and not the destination that’s valued. It’s fun to hunt for deals, and there’s value in that alone. nnWe help Americans find jobs and prosperity in Asia. Visit http://www.pathtoasia.com/jobs/ for details.

  • guest

    i don’t understand the value of this tool. i think the concept of it probably had good intentions b/c we always seem to struggle with time vs. money.

  • mroybal

    Where did the ‘Income Calculator’ go?

    • Anonymous

      Hi mroybal, the calculator is back now. n

  • Ygarraway

    For some reason nothing happens when I click calculate.

  • jaohaver

    So my time is worth $4.00…. I think that means that if it takes an hour to do something that saves me $4 or more, it’s worth it– right? How does it work the other way around- if it costs $4 or less and saves me an hour, it’s worth it?

  • jaohaver

    So my time is worth $4.00…. I think that means that if it takes an hour to do something that saves me $4 or more, it’s worth it– right? How does it work the other way around- if it costs $4 or less and saves me an hour, it’s worth it?

  • jaohaver

    So my time is worth $4.00…. I think that means that if it takes an hour to do something that saves me $4 or more, it’s worth it– right? How does it work the other way around- if it costs $4 or less and saves me an hour, it’s worth it?

  • Anonymous

    I don’t care if I have to pay $50 dollars for someone to clean my house in 2 hours….it would take me all week to do the same job! So yup even though my hour worth is $8.00 …that cleaning job is worth every penny

  • Anonymous

    I don’t care if I have to pay $50 dollars for someone to clean my house in 2 hours….it would take me all week to do the same job! So yup even though my hour worth is $8.00 …that cleaning job is worth every penny

  • Anonymous

    I don’t care if I have to pay $50 dollars for someone to clean my house in 2 hours….it would take me all week to do the same job! So yup even though my hour worth is $8.00 …that cleaning job is worth every penny

  • Anonymous

    I don’t care if I have to pay $50 dollars for someone to clean my house in 2 hours….it would take me all week to do the same job! So yup even though my hour worth is $8.00 …that cleaning job is worth every penny

  • Anonymous

    I don’t care if I have to pay $50 dollars for someone to clean my house in 2 hours….it would take me all week to do the same job! So yup even though my hour worth is $8.00 …that cleaning job is worth every penny

  • Anonymous

    I don’t care if I have to pay $50 dollars for someone to clean my house in 2 hours….it would take me all week to do the same job! So yup even though my hour worth is $8.00 …that cleaning job is worth every penny

  • Anonymous

    I don’t care if I have to pay $50 dollars for someone to clean my house in 2 hours….it would take me all week to do the same job! So yup even though my hour worth is $8.00 …that cleaning job is worth every penny

  • Anonymous

    I don’t care if I have to pay $50 dollars for someone to clean my house in 2 hours….it would take me all week to do the same job! So yup even though my hour worth is $8.00 …that cleaning job is worth every penny

  • Anonymous

    I don’t care if I have to pay $50 dollars for someone to clean my house in 2 hours….it would take me all week to do the same job! So yup even though my hour worth is $8.00 …that cleaning job is worth every penny

  • Anonymous

    I don’t care if I have to pay $50 dollars for someone to clean my house in 2 hours….it would take me all week to do the same job! So yup even though my hour worth is $8.00 …that cleaning job is worth every penny

  • Anonymous

    I don’t care if I have to pay $50 dollars for someone to clean my house in 2 hours….it would take me all week to do the same job! So yup even though my hour worth is $8.00 …that cleaning job is worth every penny

  • Anonymous

    I don’t care if I have to pay $50 dollars for someone to clean my house in 2 hours….it would take me all week to do the same job! So yup even though my hour worth is $8.00 …that cleaning job is worth every penny

  • Anonymous

    I don’t care if I have to pay $50 dollars for someone to clean my house in 2 hours….it would take me all week to do the same job! So yup even though my hour worth is $8.00 …that cleaning job is worth every penny

  • Anonymous

    I don’t care if I have to pay $50 dollars for someone to clean my house in 2 hours….it would take me all week to do the same job! So yup even though my hour worth is $8.00 …that cleaning job is worth every penny

  • Anonymous

    I don’t care if I have to pay $50 dollars for someone to clean my house in 2 hours….it would take me all week to do the same job! So yup even though my hour worth is $8.00 …that cleaning job is worth every penny

  • Anonymous

    I don’t care if I have to pay $50 dollars for someone to clean my house in 2 hours….it would take me all week to do the same job! So yup even though my hour worth is $8.00 …that cleaning job is worth every penny

  • Anonymous

    I don’t care if I have to pay $50 dollars for someone to clean my house in 2 hours….it would take me all week to do the same job! So yup even though my hour worth is $8.00 …that cleaning job is worth every penny

  • gS49

    The calculator assumes a full-time job.  However, I’m retired, with a good pension income.  How do I figure value of time without the job factor?  Or for part-time work?

    • laurashin

      Hi gS49,

      You don’t need to have a full-time job to use this calculator! Just enter in what you take home each year from your pension and any other income you receive. The calculator will still work the same — it will determine whether it’s more important to you to save time or money and then give you a good “outsourcing” point.

      Let us know if you have any other questions!
      Laura

  • http://dropthatdebt.wordpress.com/ Drop that Debt

    Umm, so handy !! I love it. Although my value is very low, but that’s kind of expected given my decent free time amount and very tight budget.

  • CrankyFranky

    I’ve previously calculated my time as worth between $2-14 an hour (disposable income after fixed expenses divided by waking hours free time)

    as a long frugalista – I still rinse/reuse my 3c coffee filter papers to save 1.5c – takes me 30 seconds – saving $1.80 an hour so not worth ? – meh – it’s like relaxation/mindless meditation so I do it because I feel good about it

    I reckon many people justify conspicuous consumption because they’re ‘worth it’, or ‘you only live once’ – sure that’s your choice, but if that results in impoverished years in old age, in retrospect you might want to reconsider the live-for-today splash-the-cash – no-one knows the hour of their demise – some will win the longevity bet, some will lose …

  • R LeClair

    According to this I am worth127 $/hr for free time. Time to quit mowing the lawn and hire someone!