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You’ve heard it countless times: Time is money. It’s true, but it’s also a bit more complicated than that.
We all want more time and money—in fact, it seems like we can never have enough time or money.
Ironically, we spend a great deal of time thinking about money and a great deal of money to gain more time.
The time vs. money dilemma stares you in the face each day.
If you want more of one, you have to be willing to spend the other.
Most of us, myself included, naturally waste both time and money without even thinking about it. We may realize it later, but it’s too late.
The good news: You can make several simple changes to the ways you think about and manage your time and money. If you do it right, you can even gain more of both time and money in your life.
It’s simpler than you may think.
Read on to learn how you can you can make the most of time and money in your life.
To Gain More Time and Money, Start Saying “No”
My son’s least favorite word is “no.” When my wife and I tell him “no,” his eyes well up with tears and his lip quivers. Sure, I feel bad crushing the adventurous soul of a 17-month old at times, but my responsibility to keep him safe and alive outweighs all else.
Of course, when we tell our son”no,” we’re really saying “yes” to a whole host of other possibilities. We may not allow him to play on the staircase, but we’ll happily take him for a wagon ride around the neighborhood or read books with him.
What do you need to say “no” to in your life right now in order to say “yes” to better things? Your answer depends on your values and goals.
I recently created a list of activities and commitments that I need to start saying “no” to with more regularity. As you’ll see, it’s not that the items on this list are bad—they simply aren’t high enough priorities to be occupying so much of my time.
There is a time and place for each activity on the list, but they take away from my ability to grow my business when left unchecked.
My “No” List
- Unscheduled scrolling on social media (Facebook, Twitter, Instagram)
- Social events with friends that are in excess of 3 hours
- Working during family time (and vice versa)
- Keeping my phone on my nightstand at bedtime
These four items may not seem significant at first glance. But by saying “no” to these habits and practices, I am saying “yes” to other activities that better align with my values and goals.
- When I say “no” to social media, I can say “yes” to growing my business.
- When I say “no” to spending excessive time with friends, I can say “yes” to staying on top of daily chores and getting the rest and quiet time I need to stay productive.
- When I say “no” to working during family time, I can say “yes” to being fully-present with my family.
- When I say “no” to keeping my phone on my nightstand, I can say “yes” to getting the rest and sleep I need to re-charge before a new day.
Again, the act of gaining more time in your life boils down to how well you understand and implement this simple concept:
When you say “no” to something, you’re able to say “yes” to the things that truly matter to you.
(If you have trouble putting down your phone and disconnecting, this 154 second video from expert Daniel Pink may help you.)
To Gain More Time and Money, Focus Your Time
Don’t be a hero. Nobody expects you to do all the things all the time.
I know it’s easy to buy into the myth of multi-tasking under the guise of “getting more done.” But research has proven it doesn’t work.
You’ll be far more productive and have more time in your schedule if you break tasks down into smaller increments and focus on one task at a time.
When you divide your attention among multiple tasks, you’re losing valuable time in several different ways:
- Your accuracy is greatly diminished, especially if you switch tasks frequently.
- If your goal is to learn and implement new techniques or skills, dividing your attention significantly increases the time required to become proficient.
- You are less likely to complete the tasks you are working on, which delays your ability to begin work on new projects.
The best way to truly focus your time is to schedule tasks and hold yourself accountable using a timer. When you focus on one thing at a time, your productivity will increase dramatically.
It will also take you less time to accomplish tasks, which will help you gain more time and money.
Know the Hourly Value of Your Time
If you really want an eye-opening experience, calculate the hourly value of your time. It will forever change the way you value both your time and money.
Here is a simple way to calculate the dollar value of your time:
- Start by calculating your annual gross income. Then subtract taxes, healthcare costs, and other pre-tax deductions. This is your annual net income, commonly referred to as “take home pay.”
- Calculate the number of hours you work per week and multiply it by the number of weeks you work each year. This is your annual total of hours worked.
- Divide your annual net income by your annual total of hours worked. This is your true hourly income, i.e. the real dollar value of your time.
For example, Pat earns $50,000 per year and works 40 hours per week, 48 weeks per year. This is 1,920 hours worked per year, which means Pat earns just over $26 per hour before taxes, healthcare costs, and pre-tax deductions.
After taxes, his net income is closer to 80% of his gross income, which means his net annual income is closer to $40,000.
The real dollar value of Pat’s time (his hourly net income) is closer to $21.
Armed with this figure, we can quickly evaluate the relationship of time and money in Pat’s life.
Evaluate the Time Cost of Your Spending to See If It Saves You Time
If time is money, one of the best ways to spend money is to buy yourself more time, right?
The objective truth here: It depends.
For example, suppose Pat hires a lawn care service to cut his lawn every week for $30. This costs him approximately 1.5 hours of time, which isn’t a bad trade because it is likely saving him nearly 2 hours per week in time, or close to $42.
What about Pat’s habit of grabbing coffee and breakfast on the way to work to “save time” each day? If Pat spends $7 per day on breakfast, or $35 per week, his total monthly breakfast cost is around $140 per month.
Stopping for breakfast each day is costing Pat approximately 6.5 hours of his time each month, while simply brewing coffee and grabbing a protein bar at home would likely take up no more than 30 minutes per week.
This may not sound so bad on the surface, but imagine working a 5 hour day and receiving a drink carrier of iced coffees and a bag of protein bars instead of a pay check.
When you start to evaluate the true value and cost of your time, it puts spending money into a much clearer perspective.
Pat’s lawn service costs him 1.5 hours of work.
His coffee habit costs nearly an entire work day.
Pause and ask yourself how many hours of work you’re spending on:
- Cable TV
- New car payments
- Rent or mortgage payments
- Dining out
Understanding the hourly cost of spending money is one of the most effective ways to stop wasting time and money.
After You Have Covered the Essentials, Place More Value on Time Than On Money
Countless studies have analyzed the relationship between more money and increased happiness. Over time, several trends and truths have emerged from these studies:
- Money itself won’t make you happy, but the experiences and comforts it can buy may be able to increase your happiness.
- For most people, general happiness does not increase beyond $105,000 for individuals living in North America.
- After all essential needs have been met, social comparison and the desire for material gain are the primary motivators to earn more money.
After your essential needs are met, you’re in position to stop trading time for money and start trading money for time.
If you refuse to jump back into the race in search of more ways to spend money beyond essentials, you are making an important decision about what makes you happy.
There are two types of people in the world: Time-first people and money-first people. If you choose the time-first approach, i.e. you are content when you have the essentials to live, you are choosing to place more value on time than on money.
At the core of this argument is an undeniable fact: Money can be made and lost, grown or squandered—but time simply goes, and when it’s gone, it’s gone forever.
3 Actionable Tips to Make the Most of Time and Money
Making the most of money and time will always depend on personal preferences, values, and priorities. But these general principles and tips will help you align your actions in a way that mirrors the way you value time and money.
1.) Time is your greatest and most fleeting asset, so use it wisely.
You can always earn more money, but time is finite. If you budget time the way you budget money, you’ll make the most of your time.
2.) It’s much easier to shift to a time-first mindset if you’ve saved a sizable emergency fund and don’t live paycheck to paycheck.
If you aren’t scrapping each week to cover your essentials and living in fear, you’ll have the flexibility to value time over money. An emergency fund of 3-6 months of living expenses is the smartest way to protect yourself from financial struggles.
3.) When faced with the choice to make more money or gain more time, consider which option will reduce your stress and help you enjoy your life to fullest.
Choosing more time doesn’t make sense if it will cause you to worry about money. And more money won’t help you if it leads to a workaholic lifestyle.
I hope you found this post helpful on your journey with money. If there is a way we can make it better or more helpful, let us know in the comments section below! Thanks for reading.