“One can earn more money, but not more time!” – I have no idea who said this, but I think I saw it on Instagram somewhere, and it captures the idea of the value of time.
About a month ago my wife wrote an article about how being focusing on being frugal can lead to a sinful attitude she named “frugally proud“, where you gain a sinful pride out of how cheap you can be, despite the costs. She was inspired by a show that we watched a few times on Netflix called, “Extreme Cheapskates”.
Consider The Value Of Time
Watching that show has made me reflect on one of my biggest pet peeves – not considering the value of time! These people are satisfied as long as they are able to pay little to nothing for what they want. It doesn’t matter if the cheap way takes them 3 times as long or causes them to use more physical labor or even encroach on others; as long as they save their pennies, it’s worth it.
I remember a time where I valued saving a buck at the expense of wasted time. I had such tunnel vision. I was only able to see the lower price that I was paying, and never considered other factors such as the value of time – both mine and others.
For instance, I have always despised paying tolls. Unfortunately, I live in New Jersey, and it is pretty much impossible to quickly travel north and south through the state without paying a toll. So, if I had a little extra time I would simply get off at the exit before the toll booths, and ride through the city, and then get back on the highway at the first entrance after the tolls.
Sometimes it would only take me a few minutes to get back on the highway; however, with lights, traffic, and the location of and distance between exits/entrances it could take up to 20 minutes to get back on my way! I’m sure that people who are familiar with the Garden State Parkway are laughing at me right now. I did all of that to save $0.25!
If it took an average of 10 minutes to get back on the highway, that means that I only valued my time at $1.50/hour (10 minutes is 1/6 of an hour and 6*$.25 = $1.50)! So in this case it made a lot more sense just to pay the toll and save my valuable time! Now I have E-Z Pass, and try to avoid being that cheap.
The same is true when it comes to driving around for 10 – 15 minutes trying to save $0.02/gallon in gas. Fill up a 15-gallon tank and you only save $0.30! Did I only value 10 minutes of my time at $0.30?
There are many other examples we could look at, but the analysis would be the same:
How much time does it take to acquire the savings? Compare that to how much money you will actually save and see if it is really worth your time and effort!
Many times you will find that you would be better off spending the normal price and then using that saved time wisely.
I believe that valuing time is the major distinction between someone who is frugal and one who is cheap just for the sake of saving a dollar. When trying to decide how far to go in order to pay less money, first figure out how much additional time will be needed in order to realize these savings.