Calculating the Value of Your Time
- Successful entrepreneurs consider what their time is worth when running their businesses.
- Calculating the value of your time can be useful when deciding how to spend it.
- There are both objective and subjective ways to look at the value of your time.
When entrepreneurs grow their businesses, they have to calculate the value of their time. If they’re going to hire employees, will those salaries be offset by allowing the entrepreneur to spend their time doing something more valuable? The most successful entrepreneurs have this figured out.
We can take a page from their book and look at how we use our own time throughout our lives. For those who are no longer working, there may be a mindset of having a lot of time and just taking everything on themselves. However, there are both objective and subjective areas to consider when looking at how to spend our time, regardless of whether we’re working or retired.
On the objective side, there are some hard dollar amounts you can apply to certain things. For instance, home upkeep jobs such as plumbing, carpentry, cleaning, lawn care, and the like. You could pay someone hundreds or even thousands of dollars for this work, or you might decide to do it yourself. You would weigh how confident you are that you can do the work, along with how much time it would take you, against how much it would cost to pay a professional to do it.
Then there’s the subjective side, which has more variables. For instance, there’s your health. Perhaps you’re at an age where completing certain tasks would be difficult to do. If the work negatively affects your health, saving a few dollars isn’t really worth it.
Another aspect of the subjective side is the emotional. There may be some tasks that are especially frustrating to you or your spouse. We all have those things we just don’t have the patience to do or figure out. In these cases, you’d rather just pay someone to deal with them, and you’d likely feel it’s money well spent!
There’s also a spiritual or purpose-driven aspect to the subjective side. We all have different purposes in life and the way we spend our money and time can reflect that. For instance, there may be a charity that you’re willing to spend tens of thousands of dollars and countless hours supporting that others wouldn’t ever consider. This is your discretionary money and your time, and perhaps by saving both in other ways, you’re afforded the opportunity to spend them in ways that fulfill you.
Regardless of whether you consider the objective side, subjective side, or both, when it comes to your time, you’re the only one who can figure out what it’s worth. No one else can put a price on that. Until next time, enjoy.
If you’d like to read more on this topic, here are a few of our past Coyle Blog posts that you might enjoy:
Gary Klaben serves as a Financial Advisor, and visionary for Coyle Financial Counsel. He has over 30 years of experience and is the author of Changing the Conversation, Wealth of Everything and co-author of The Business Battlefield. Whether advising his clients, mentoring his team, or coaching entrepreneurs, he is always simplifying complexity and motivating others to take the next action that’s right for them.
Learn more about The Coyle Process, approach designed to get your arms around the big picture, so you can make informed financial decisions. Ask Gary about The Coyle Process and schedule a complimentary consultation and start living the Good Life Managed Well™.
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