how much money is your time really worth

July 30th, 2008

How Much Money Is Your Time Really Worth?

This will probably be controversial, and I know that a lot of people reading it won’t agree with me, but that’s okay.  Not everything I think is universally accepted as truth, and I’m okay with that.  :)

I often read things where people talk about how certain things aren’t worth their time.  Things that I have done in the past (and continue to do), like take online surveys, selling items through eBay or Craigslist, even part time jobs.   And I can understand that mentality, and know that it is probably true for some people.

But I contend that it isn’t true for as many people as one might think.

Valuing your time in a monetary way is a tricky proposition.  It can’t be valued solely as “I make X amount per hour when I work at my normal job, so that is what my time is worth” unless what you do for work is something you can do anytime, anywhere, and whenever you want to earn money.  Then, if you want to earn extra money – work more at your job, and earn more money.  For me, tutoring is sort of like this.  I can’t work all the time, but I can check to see if there are students waiting and pick up floating hours if I am available and students are available.   It isn’t completely free-form, so I don’t look at it as a guaranteed rate per hour I can earn whenever I choose, but it is more flexible than many things.

But my spouse, for example – he works when he works and he earns a salary.  If he works 40 hours a week or 60 hours a week, he earns the same salary.  Although he earns a good amount per hour for his 40 hour work week, he can’t expand that at will for more pay.

So what is my time worth?  What is my spouse’s time worth?  If we want to earn extra money, do we turn down opportunities because the rate of return is too low?  I do not want to give the impression that I think you should be earning money every hour.  We need time for family, to relax, to have fun!  But if you want to earn money, should you meet the rate of return of your “regular” job or should you value your time lower than that?

For me, it depends on how important earning extra money is to you and what your options are.  Do I do things that earn me below minimum wage per hour?  Yes, I do – although as I have developed other sources of income more fully, I don’t do them as often.  But I have taken online surveys for years, averaging probably a few dollars an hour (if that), but for me it worked.  Because I filled time that I didn’t have any other available income source with taking a few surveys.  I’ve also spent more money than the return I got on listing items for sale and selling them.  But besides the decluttering of my house, it provided money to me that I wouldn’t otherwise be taking in.  I’m not replacing time I could be earning $10 a hour with opportunities that earn $4 an hour – I’m replacing time I would be earning $0 an hour.  If all I was going to do with that hour is sit on my behind and watch some TV, and I’d rather earn a little money, I am okay with it truly being a little money.

Now, do I recommend a person structure their entire income around opportunities that pay less than minimum wage?  No, of course not.  But depending on your options, a few dollars for an hour of work might help you make a little more progress on your financial goals than you were making before you started exploring that option.   And if that doesn’t sound palatable to you – become an entrepreneur and develop sources that meet your expectations.

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22 Responses to “How Much Money Is Your Time Really Worth?”

  1. This is a great post that reminds us that the equation for your time valuation isn’t exactly cut and dry.

    However, I do use the equation as a benchmark, not so much as a hard and fast rule.

    The other way is to set your HDI or your Hourly Disposable Income
    I wrote a short post about how to calculate it here, (and not my idea, it was another great PF person who came up with it)

  2. I also forgot to mention that if you’re an independent contractor like I’m trying to become, you can truly work at any time at any hour as a mobile employee. So that’s a great option for people who are not in a corporation earning a salary.

  3. Good article.

    You ask how much MONEY is your time worth. I think there are other things to consider as well.

    If I can “work” selling items on eBay or craigslist, while wearing a t-shirt and sweat pants, taking care of my granddaughter, baking a pan of lasagna for dinner and running a load of laundry all at the same time, then it’s more than worth it to me to make less money per hour. For me, the OVERALL VALUE is greater than going outside of the home and working for more dollars per hour.

  4. I’m a SAHM, and am like you doing online surveys and other oddball things to pick up a few $$ here and there to supplement my DH’s income. I just want to let readers know that in most (all?) communities a position that takes just a few hours of time commitment but that does pay a renumeration is Election Judge. In many communities accross the country they are currently recruiting to fill a shortage of election judges, as a high voter turnout is expected in November. If you are interested, you should check with your local Board of Elections!

  5. Great post! I think there is a weighted value on your time – given a choice between A and B, how much do I value A over B or B over A. Recently I had a opportunity to work some overtime on the same weekend of my fahter’s 60th birthday – I chose the birthday because I value family over money. I think you make a good point where you state if you were going to be making $0 or a couple bucks which would you rather have? I think debt is a lot like exercise, something is better than the nothing you could be doing.

  6. Thank you! I know many people calculate using their hourly rate at work and the math just doesn’t add up. Instead, I think of things a little backwards. If I save $25 at the grocery store I think I would have needed to work an extra hour for that money (which I couldn’t anyway because I’m a teacher and my salary is my salary). I really find it kind of soothing to just sit and cut the things out (maybe I’m weird). Same thing with a yardsale. Not only is my house a much better looking place after one, but I also get to meet some nice people and have some extra $ in my pocket.

  7. It’s a tough one to answer. For example, I was doing Pinecone Research surveys for a little while but I finally got sick of the time required, 15-20 minutes of a boring survey just isn’t worth $3 to me.

    It really comes down to what do you want to be doing with your time and placing a value on the options you have. I spend enough time working and I don’t really want to fill in my free time doing things that are only worth a few bucks, but it’s all relative of course.

  8. Great points in this post – I’m so glad you wrote it! I hate to see people ducking under “it’s not worth my time.” If you don’t want to do something, just say that, but don’t pretend that it’s because of some arbitrary bit of math!

  9. Great Article! I’ve had this debate with different people a lot. Most recently, I was at the store with a relative, and he was offered a rebate form to get $2 back. All he had to do was mail his receipt and the form in. He told the cashier to throw the form away. I said “oh no, wait a minute, let me do it!” He’s a close relative so i wasn’t embarrassed to ask, but it did spark a conversation between us in the car regarding the ‘worth’ of time.

    As for surveys, I do them during commercial breaks which would otherwise be completely wasted time. I also do activities on Boomertowne during commercial breaks, to earn points for Visa gift cards (you should check it out, if you haven’t already)

  10. Hey, a buck’s a buck, especially if you’re making money during time you’d usually spend (passively) spending money. Especially sweet if it’s tax-free bonus cash.

  11. If you work a 40 hr job, 5 days a week, at $10 hr (example)with no paid holidays (my job), and you consider that that job ‘ties you up’ for all your day/night,(24 hrs) then in a year you make $20,800 for the year. Divide that by 8760 hours a year (365 x 24), and you come out with $2.37 per hour… (depressing, isn’t it)

    I figure any ‘free money’ is a good thing after figuring out that comparison :) And I am able to do most of my surveys at work…. so that makes it doubly good in my book….. I just have to be here in case a customer arrives… when one is not here, I have some available free time.

    Any ‘free time’ is a good time to make money :)

  12. My time is very valuable, that’s why it’s important to find something that works well, calculate it’s return/hour, and then outsource it for less than that! It’s really easy to do with things like creating review sites or lazy affiliate marketing. There’s this video up by the Rhodes Brothers that’s all about taking something that works well, and doing it over and over. Couple that idea with outsourcing…and you’re golden!

  13. For me, it is more of a lifestyle than a dollar question. I love my work from home lifestyle. And I always try to find work which suits this…

  14. I’m a multitasker. I can do surveys at work, when I’m already getting paid. :)

    But I find there is some non-tangible benefit to some activities – babysitting is giving me some exposure with child care (plus when the kids go to bed, I do school work). Working at my yoga studio gives me free classes plus I’ve met some really great people. Other side jobs can be turned into learning experiences too. It’s not always about the all-mighty dollar!

  15. I agree with you. It is tricky to value your time, in actuality it depends. My time that must be set aside in advance would cost much more. If I can just take an hour this week sometime if I feel like it well that might be cheap – if I have a bit of time. If you want me to do something I enjoy like posting to my blog I don’t need to see much cash, for something else I might require alot more…

  16. I think it also depends on what you are going to do with that little bit of money that you earn. If you’re just going to go blow it with unnecessary spending, then it probably isn’t worth your time. However, if you are using it to start your debt snowball, then it could make all the difference. Also, that little bit of money is worth so much more in the long run if you are using it to pay down debt. If you snowflake $10.00 per month in survey money towards debt, it is actually worth more than $10.00 because of the interest that you save over time. Plus, it buys peace of mind when all is said and done and to me, that is priceless.

  17. Thank you very much for the great information…This is an important thing to get right

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