If Time is Money, What are You Spending?
If you are expecting this post to be about time management, you are about to be mistaken.
Consider this well-known phrase: “time is money.” While that may be true to an extent, I believe a more accurate phrase is “money is time.”
How many hours of your life were spent at a job you dislike just so you could afford the car you drive?
How many hours do you spend away from your home in order to afford your house?
I think this is a serious problem that more people need to think about. When you suddenly realize that you are making purchases with hours of your life your debt situation seems a little more dire, doesn’t it?
The Time Debt Challenge.
I want to issue you a challenge: Before making your next purchase, calculate how many hours of your life that purchase is costing you.
For this challenge to be particularly accurate you will need to know your hourly rate after taxes have been taken out. In order to calculate this number, divide your post-tax paycheck by the number of hours that you work. For instance, if your take-home paycheck is $560 and you worked 40 hours, you are making $14 per hour after taxes.
Let’s imagine that you’d like to purchase a new couch for your living room, and that couch costs $600. To figure out how much time this purchase will cost you, divide the purchase price by your hourly rate: 600/14 = 42.86 hours. You will work more than one week for the purposes of purchasing this couch.
This challenge is not meant to be depressing. Some purchases are necessary; we must have roofs over our heads, transportation to our jobs, and some form of entertainment in our lives if we are to enjoy life safely. But what about frivolous items that you really don’t need, like the newest video game system? What about that new brand-name jacket you want? Is it worth the extra cost, or would a lightly-used thrift store version fit your need for warmth? This challenge is meant to make you aware of your time debt, and to plan your purchases accordingly.
Your Monetary Debt is Time Debt, Too.
If you are already paying for prior purchases in the form of loans and credit cards, you are experiencing time debt. There are a few things you can do to ease the burden of this time debt:
Increase your hourly pay rate.
Ideally, if you could double what you make in an hour you could work half as much. That’s not feasible for most people, of course. Could you ask for a small raise, though? Could you move to a higher paying job? Even an extra $50 in your paycheck will make a dent in your time debt.
Minimize your life.
I love the idea of the minimalist movement. The idea is to surround yourself only with what is useful to you, beautiful in some way, and makes you happy.
For example, I essentially have three outfits I wear to work: jeans, a tunic and leggings, or khakis. I rotate through 4-6 shirts that I feel comfortable and professional in. Because I can wear these outfits when I go out with friends there is actually no reason for many of the outfits I have in my closet. I have used Tradesy* before to downsize my closet and sell some of the items I no longer wear.
The point of using minimalism is to eliminate cheap things from your life. Instead of buying many shirts for a low price, a minimalist may spend more money on a shirt that will last longer. In the end, you have more closet space, spend less time dressing (read: getting dressed 3-4 times and ultimately being late for work), and get to embrace the $0 balance on your Victoria’s Secret card because you haven’t had to go shopping in two months.
Minimalism helps your time debt in a few ways:
- By sticking to a minimalist lifestyle, you are less tempted to add new things to your life. This means that you are spending less on a daily basis.
- By purging your life of unnecessary items, you have the potential to sell these items and make money that can be put towards your debt.
Downsize your expenses.
This goes beyond telling you to move into a yurt in the middle of nowhere to save on expenses. I imagine you are living in your home for a reason, and I know that our locations are often stagnant because of work, family, our children, or other life circumstances. But you can make some cuts to downsize your lifestyle.
Choose when to go out. If eating out isn’t a priority, you will save money on dining expenses as well as saving gas.
Work out at a local YMCA instead of a fancy gym. Often a year-long membership at a YMCA will cost as much as two months at one of the higher-end gyms, and you have many more benefits through the YMCA.
While we’re on the topic of fitness, is personal training really necessary? Partner up with an intense friend and motivate each other. Look on fitness websites for workout tips and tricks from experts who won’t charge you $80 per hour.
Can you find some free entertainment? Libraries are now going beyond simple books (although, as an English teacher, I encourage you to read!). There are many free events, movie nights, clubs, and activities that you can join. Movie rentals are usually free, although I just had a nasty surprise when a local library charged me $1 just to take out a movie.
Cut back on your grocery bill through a program like Checkout 51, which offers savings on many everyday purchases.
Time is Valuable.
The point of financial stability, at least for me, is to have time to spend with my loved ones. While stacks of money are fantastic, and I would not argue if they started flowing into my life, I want time to spend doing things I enjoy. Every student loan payment is a reminder that I owe a time debt.
Do you recognize your time debt, or is this a new idea for you?
*Disclaimer: if you sign up at Tradesy through this link you will earn a $25 credit. If you make a $100 purchase (which goes completely against the point of this article!) I will receive a small cash bonus.