Time VS Money: Which to save?
Alright, this is a hot issue that many young working adults face. Be it buying a cheaper air ticket on a weekday or buying a car, you name it I’ve heard it. Discussions around a money topic are always endless and it’s time to address them.
I have always, at least majority of the time, made my decisions using the time vs money theory after one particular friend asked me if he should outsource that data entry task of his. It was a pure lightbulb theory that I came up with for myself, probably from reading tons of articles on management.
How do you value your time?
Since money is that value of money, we can just skip to the value of your time. There are, as far as I can think of with my tiny brain, three ways to value your time – happiness level, monetary value and potential time saving. Here’s a table of some examples to let you better understand what I mean.
|Happiness Level||Monetary Value||Potential Time Savings|
|Paying for experience ($200 for skydiving)||Comparing prices of functional items (pen, pots and pans etc)||Spending on things that lets you potentially save more time in the future (eg instant cooker that cooks a meal in 10 mins VS cooking it yourself in 2 hours)|
|Getting luxury items ($1000 branded bag)|
|Paying for convenience (transport, equipment that makes house chores easier etc)||Outsourcing manual tasks that takes up your time to earn more money|
|Paying for nicer appearance (facial, haircut slimming etc)|
For my case and personal preference, I prefer to use the monetary value of time to decide whether or not I should spend that money most of the times. There will be different metrics that you take up I will be stating 3 examples that I have experienced before, either by myself or by friends around me.
Using the following as a reference:
Value per minute = Income Earned During Time Period / Time Period
Should I book a cheaper air ticket on a Friday morning or a more expensive one on a Saturday morning?
The most common calculation will be to take your income earned as your salary.
Value per day = ($3000/ 20 days) = $150
Cheaper Air Ticket on Fri Morning = $250
Expensive Air Ticket on Sat Morning = $360
Cost of flying on Fri Morning = 1 day leave + air ticket = $150 + $250 = $400
Cost of flying on Sat Morning = $360
Assuming all conditions stay the same, and that you will fly back on Sunday regardless of when you fly off, which option would you choose after a comparison of the cost? (Ps: decide if one more day of fun is worth your $40!) There is no right or wrong answer but just how you prioritize your options.
Should I outsource this data entry task to a freelancer or do it myself?
The next type of calculation you can use will be potential income earned from time savings.
Time required for you to complete data task = 4 hours
Freelancer’s total salary for task = $240
Potential sales you can close in 4 hours = 2 sales
Value of total potential sales = $600
Cost of doing the task yourself = $600
Cost of outsourcing task = $240
In this case, it depends on whether or not you would be willing to pay a $240 for a chance of getting the additional income. From the perspective of an entrepreneur, it would be wiser to outsource that piece of task and focus on business development instead of doing the manual work yourself. However, should your business be on a phase of just starting up and simply bootstrapping, you could decide to do the task yourself.
After talking so much about how to make decisions on whether to save time or money, it’s time for me to hear what others have to say.
So tell me, how do you make your decision on spending time or money?