Why knowing the value of your time is so important
Do you know the real value of your time?
Time is money, or so they say. Some will agree, others won’t, but the saying hits on something important. Time has value, and we should know that value.
What is the value of your time?
There are two simple ways to value your time, hourly rate and opportunity cost. Your hourly rate is what you could be making with your time at any given moment. Your opportunity cost is what you are giving up at this moment by doing whatever you are doing.
Hourly Rate
Figuring out your rough hourly rate is simple. Take what you made last year, and divide by the standard work hours for the year, which is about 2,080 hours. Let’s use some easy numbers for the sake of example. Let’s assume you make $100,000 per year, and you have 2-weeks vacation in the year, bringing your work hours down from 2,080 to 2,000 work hours for the year. $100,000 divided by 2,000 work hours is $50 per hour.
Knowing your hourly rate is important if someone asks you how much you will charge to do some contract work, but it’s much more than that. Knowing your hourly rate helps you to see that your time has actual value. Recognizing that your time can have a monetary value helps assess what you are willing to spend your time doing.
A quick example from my life. I can mow my grass, but should I? Let’s assume getting my lawn cared for will cost $100 per month; that seems like a lot! But, once I realize that to do the job of a professional crew, I would need to spend at least four hours a month mowing grass, and recognizing that the value of my time is more than $25 an hour, I realize that paying for lawn service is not just a good idea, it’s the fiscally responsible thing to do.
Opportunity Cost
Knowing the opportunity cost of how you spend your time is also important in assessing its value. If you say yes to this thing, what other thing are you missing out on doing? To spend our time well, we need to spend it on the most valuable things. And, to spend it on the most valuable things, we must recognize there is always a trade-off between the things that we are doing and the things we could be doing.
I’m writing this from the kitchen table. 15 feet away, one of my kiddos is watching cartoons. In choosing to write for this moment, the opportunity cost is snuggling with my little buddy and watching cartoons with him. That’s a pretty big sacrifice and tells me that I really value writing to both refine and share my thinking (don’t worry, I’m about to snuggle that little guy too).
How do you value your time?
We all have limited time in this world. As such, at some level, we all want to spend it well. This is how I think about my time and gauge how I spend it. How do you choose how you spend your time?
Leadership reading from the week
Dunbar’s Number: Why the Theory That Humans Can Only Maintain 150 Friendships Has Withstood 30 Years of Scrutiny - If you are building communities of any kind, Dunbar’s Number is important to understand.
6 Principles to Build Your Company’s Strategic Agility - I love how this article approaches things. Running a company this way will help it to move quickly and grow effectively.
7 Strategies to Break Down Silos in Big Meetings - Silos are an issue in any company with more than a few people. I love some of these approaches for getting past that.
Something I’m thinking about - the value of boredom
Considering my writing about knowing the value of your time, this may seem odd. I’m reading Deep Work, and the author points out that boredom can play an important role in creative thinking and problem-solving. I’m starting to realize that I need more boredom in my life.
Interesting reading from the week
Facebook is the AOL of 2021 - I hate to say it, but I agree. Facebook has been on the decline for a while, and the whole idea of trapping everyone in one network that does everything is antiquated.
After 200 Podcast Interviews, These 9 Questions Built the Strongest Connection - We’ve all had boring, “getting to know you” conversations. These questions will make chatting with someone much more interesting.
Interesting podcast episodes from the week
Gangster Capitalism: S3: Jerry Falwell Jr. and Liberty University | Bonus: Jane Does v. Liberty - Season 3 of this podcast is about the downfall of Jerry Falwell Jr. I grew up in evangelical circles, so I have found this season profoundly interesting.
The Rise and Fall of Mars Hill: Questioning the Origin Myth: A Rise and Fall Short Story - This episode is similar to the one above, about the fall of an evangelical leader. It’s been sad to listen to but cathartic in some ways as well.
My Podcasts to check out
Tech Talk Y’all - My tech/comedy news podcast.
TogetherLetters - My podcast about the app that I’m helping build to keep people better connected.
Real Pink - I host the national podcast for Susan G. Komen. If you want some inspiration or information about breast cancer, give it a listen.
TechBridge Talks - A podcast about using technology to end generational poverty.
That’s a wrap!
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