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Here’s how to calculate, in dollars and cents, the value of your time
Written by Chris Bailey × July 17, 2018
Takeaway: It’s worth calculating, in dollars and cents, what your time is worth to you. Chances are the value will orbit around four things: how frugal you are, how much you value your time, your income, and how busy you are or how overwhelmed you feel.
Estimated Reading Time: 3 minutes, 7s.
Calculating how valuable your time is can help you determine which tasks are worth spending your time on.
When it comes to productivity, one of the most powerful things to realize is that not all tasks are made equal. Some tasks in your work and home life—like training new recruits, investing in your learning, and playing a board game with your family—are valuable and meaningful to you. These are infinitely more important than repetitive work tasks, or maintenance tasks at home, like mowing the grass, cleaning up around the house, or doing your taxes—all of which can easily be delegated to a virtual assistant, student, or kid down the street.
Everyone can place a value on their time, and doing so is one of the most valuable calculations you can make when it comes to your productivity. There are countless ways in your home and work lives to buy back some time. Obviously you won’t always be able, or want to delegate tasks—especially at work, where you may not have the budget or flexibility to hire an assistant or student to work on your team. But when you look around, there are countless ways of buying back your time.
For example, deciding whether to:
fly or drive somewhere
take an Uber or public transportation
hire someone to mow your yard, shovel snow, or clean your place
hire an assistant, student, or team to delegate low-return tasks to
hire someone to do your personal or business taxes or accounting
becomes infinitely easier when you calculate exactly what your time is worth to you. Naturally, if you find value or meaning in the tasks above, they may not be worth outsourcing to someone else.
This calculation is entirely subjective, but over the last several years, as I’ve calculated my personal amount, I’ve found that the value has orbited around four things:
How frugal I am.
How much I value my time.
My income level.
How busy I am, and how overwhelmed I feel.
Even when I was a starving student, I found that there was a certain amount I would pay to buy back an hour of my time. Back then, I did my own taxes and worked a minimum wage job because my time wasn’t worth more than that—but it was still worth something, I figured around $5/hour. Today, many years later, the equation has changed: I’m busier and actually have a stable income, so I’m willing to pay more to buy back an hour of my time. In both cases, calculating how valuable my time was gave me a benchmark to see whether buying back some time was worth it.
I have a simple challenge for you: right now, spend a few minutes considering what your time is worth, given the variables above. The calculation takes some thought, but it will pay dividends over time. If you can’t do it right now, schedule 15 minutes in your calendar tomorrow to do the challenge—no matter how low or how high you think the number will be.
Every minute you save by not doing low-value tasks is one precious minute you can spend doing something more meaningful or important. When how productive you are is a direct result of how you spend your time, knowing the value of your time will let you evaluate opportunities to buy it back in the future. Every minute you save by not doing low-value tasks is one precious minute you can spend doing something more meaningful or important.This will let you spend your time on more meaningful things.
Illustration by Sinisa Sumina.
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