Can you put a price on time?

March 27, 2014

One way or another, we're sacrificing one thing for the other. Spend money to save time, or spend time to save money. But we all understand the value of money, as it's tangible, countable and manageable.

By Michelle Brohier

Everyone knows what it’s like to be busy. To many of us, it’s a lifestyle that we continue to lead until today. Because of this, we all understand the concept of how precious time can be, as there never seems to be enough of it. Because time is so precious, many of us are willing to spend quite a bit to make sure we have enough to do things we deem is more important. While others, in their attempts to save as much money as possible in these tough economic times, don’t mind sacrificing time to save some money.

One way or another, we’re sacrificing one thing for the other. Spend money to save time, or spend time to save money. But we all understand the value of money, as it’s tangible, countable and manageable. That’s why we understand the loss of it when we sacrifice money to save time. But if we can put a value to time, how much money could it be really worth?

Calculate your time’s worth
To be honest, there’s no real way we can put a value on time. After all, since value is derived from the supply we have – none of us are truly sure of how much time we have on this earth. So though this is by no means an attempt to cast in stone the absolute value of time; it’s just one of the many ways you can look at how much an hour of YOUR day is worth.

Every hour we dedicate to work, we earn a certain amount in return. So when you’re not earning, how would you be spending it? That’s one way of looking into the value of your time. An average Malaysian, especially around the Petaling Jaya district, earns about RM47,996 a year. If you calculate your current hourly wage, you’ll be able to determine how much an hour is worth in your situation, especially once you’re out of working hours. So for those earning the amount mentioned earlier, this means you’re earning RM23 per hour.

Now say you’d rather drive 20 minutes away for a good meal. That’s a good RM7-RM8 of your time spent to get there, and this of course doesn’t involve the amount of money you’re actually spending on petrol, parking and food you’ll use your actual money to spend on. So you’re not physically losing money by spending time driving right? That’s right. But if you think about how much money that amount of time costs, and how much RM7-RM8 is to you, you may start to think that driving that far for a meal may not be worth it in terms of time as well.
 
Spend time, lose money?

 
Some of us are willing to spend a lot of time in order to get a good deal. For example, you spend almost 5 hours at the MATTA Fair hoping to get a good deal, but you come out empty handed as many of the deals offered weren’t attractive to you. If you think that was a waste of time, imagine realising that time costs RM115 and that’s when the true worth of your loss hits you. Or maybe you did get a deal by going to a grocery store with even further discounts. But if it took 80 minutes to drive there, that’s RM30 down the drain, and if you only save RM15 from your grocery, that shows that you’ve wasted more time in your attempts to save money.

Even so, it is still possible to spend more time and you’ll get a better deal for your money. You just need to weigh in on how good that deal is. If you managed to get a good tour package during the MATTA Fair that you know you’ve saved at least RM1000 from, then spending that much time feels completely worth it. At the same time, if your journey to the restaurant of your choice with your food ready all within 15 minutes or less, that’s around RM6 in terms of time. And with the quick service and hearty meal, it could be both time and money well spent.
 
The cost of time
But even with this reference, it’s tough to put a price tag on time. You definitely wouldn’t want to start calculating the cost when you’re on holiday, or with your family and friends. And you definitely don’t want to start thinking about how “time is money” when all you really want is a break from the busy week you’ve had and just need to sleep over the weekend to recover. After all, that’s the time you earned and you can spend it however you want to.

What’s important is to consider all the factors that go into the cost of an item, including your time. If you’re trying to save money, make sure that you’re not wasting your time. In the same manner, if you’re trying to save time, make sure you’re not wasting money as well. Weigh in your options, and be sure to consider what you think is more important to save and spend on.

This was brought to you by MICHELLE BROHIER from RinggitPlus.com. RinggitPlus compares credit cards, personal loans and home loans to help Malaysians get more for their money.