One of the things we hear all the time when it comes to tips on saving money is to “Do it yourself!” You can save money by accomplishing any number of things yourself. On top of that, you can save money by clipping coupons, as well as by braving inconvenience in the name of a lower airfare. While you might be spending money when you follow this philosophy, it’s also important to recognize what you’re spending: Time.
Is Your Time Worth Something to You?
Many people don’t value their time. We’re taught to believe that saving money is more important than enjoying the time we have. It’s fairly common advice to put in the time to clip coupons to save a few bucks a week, or to change your own oil in order to save $40 every three months. And there’s nothing wrong with this — as long as you don’t mind sacrificing the time.
But what if your time is worth a little bit more to you? What if you are interested in using your time for something else, even if it means paying someone else to mow the lawn, change the oil, or to act as a virtual assistant for your new home business venture? There are lots of reasons that people pay other people to do things they could do themselves, and there are reasons that I prefer to spend an extra hour a week with my son and husband, rather than looking for the right coupon/sale combination that will save me $30 on my grocery bill.
Think about how valuable your time is to you. What do you want do with your time? With whom do you spend your time? If you could spend a little extra money, or if you were willing to give up some savings, so that you could spend more time doing what you want, would you? How valuable is that part of your life? It’s hard to put a monetary value on relationships, personal time, convenience, and personal well-being. Often, though, those things are more valuable than mere money.
In Money Terms, What’s Your Time Worth?
Another way to look at it, especially if you pay someone else to do something you don’t want to do, is to consider the monetary value of your time. If you were to work for a set period of time, how much would you make? I could probably change my own oil. However, in the time it takes someone else to change my oil, I can do enough work, sitting at the shop with my laptop, to pay for the oil change and then some.
When I pay someone else to do something, and then use that time to work, I actually come out ahead. If I did it myself, I’d lose money because. I can make more money with an hour of work than what I could make spending the same hour clipping coupons. Consider what your time is worth, and whether you could make more doing good work, or investing in your side business, over the long term. You might be surprised to discover that your time is worth more than you thought.
I totally agree. This is a really valuable concept to get a hold of. Many get stuck in this “frugal” mindset and think it’s best to do things themselves and take the time to always search for the best deals. But in reality, if you can do something more valuable with your time you’re better off paying someone else to do that thing for you.
I’ve done my lawn by myself. I do a pretty decent job. But it takes not only time but energy. After I’m done I’m kinda beat. In that time I could be working on my business. Or spending it with my family. The person I hired can do the lawn in a 3rd of the time and it doesn’t cost me any energy. AND I get to spend more time and energy on the weekend working to make more money.
Hi Glen,
IMHO this is one of the most important concepts an entrepreneur must understand. Even though I didn’t right this post myself I 100% agree and is why I approved this post. We may not have the same resources (ie money, talent, network of friends) but we are all equal in one aspect – TIME.
Unfortunately, some never get out of the mindset of frugality. Good business owners know they aren’t good at everything (including personal tasks) and hire others to do things for them.
Though with this being said, in some cases it makes sense to do it yourself. Either for the experience, or it’s a valuable skill set to have. By at least doing it once you know the work involved when outsourcing it to someone else.
Although Miranda doesn’t state this, research says most people are worth approx. $20-30/hour in high educated positions. It of course depends up various factors, but it’s something you should know and calculate. That of course is a good cut off amount. If say you can hire someone that can do it for $10/hour, you are best to outsource the work.
It’s like a mini party here on InvestorJunkie
Anyway, you guys know I’m not a penny pincher at all, and that I think there are plenty of things more valuable than money. Time is an especially important one for me. Like you say, Larry, everyone has the same 24 hours a day. What are we doing with it?
I think this line is extremely important – “When I pay someone else to do something, and then use that time to work, I actually come out ahead.”
Most people use the argument of, “my time is worth ‘x’”, to justify paying someone to do something that they’re too lazy to do themselves. Things like mowing the lawn or counting coins can easily be done in your spare time (meaning, you’re not always on the clock). You’re not worth $30/hour when you sit on the couch watching TV at night.
But I agree that if you’re productive with your time then it can make sense to outsource small jobs.
The value of your time is definitely something you need to consider. However, I’ve found that few people need know how to do so. The important part though, is if you are paying someone to do something that you don’t want to do, that you actually work that extra time. Otherwise, what you are really doing it paying for leisure time and you shouldn’t pay for something you can get for free.
This is actually one concept I very much stress to my parents. They always want to do things themselves, thinking they are saving money, when in reality, something that effectively comes out to $5/hr is a complete misuse of their time. My mom is the worst, because she’s a semi-hoarder, and insists on having garage sales (fortunately never does). Even if she sold $100 worth of stuff in a 5 hour day, her day job/business pays her multiple times more than that. Wish they would actually listen to advice like ours.