The Big Idea: Accounting for Time

The research is unambiguous: People who value time more than money are happier and more productive. But actually shifting to a time-first mindset is really hard. Partly, it’s because of how our brains are wired. Partly, it’s because we don’t know how to measure what time is worth. A $10,000 raise is easy to understand; calculating the value of an extra 30 minutes isn’t so simple.

Some research on time and happiness has been devoted to assigning a tangible value to time and the happiness it produces. The hope is that when people are faced with a time-or-money decision, they’ll more easily see that giving up the money isn’t a loss. The primary metric is the dollar equivalent of happiness. In other words, the positive use of time produces a happiness boost equivalent to what we would expect from a rise in annual household income.

The process for assigning cash to time and happiness isn’t all that straightforward. Surprisingly, buying time is most effective when you have less money. For a person who makes up to $50,000 per year, the value of buying time can reach the equivalent of $40,000 in additional annual income. For someone who makes more than $125,000, it’s $16,000 — still substantial. The lesson is that everyone who wants a big gain in happiness should spend money to buy back time. Here are some early examples of time-value calculations made.

SHIFTING YOUR MINDSET to value time over money brings a happiness boost equivalent to gaining $2,200 of annual income. This boost is from simply changing how you think, even if you do nothing else differently. The effect is likely due to the reduced stress that comes from not obsessing so much over money or worrying about how to get more of it.

SAVORING MEALS induces happiness. Americans spend much more time choosing what to eat than other cultures, and they don’t enjoy mealtime as much or spend as long eating. Decreasing the time spent on decisions around meals — what to eat, where to eat, with whom — and spending more time enjoying a meal with others will gain you the happiness equivalent of a $3,600 bump.

SPENDING TIME TOGETHER IN RELATIONSHIPS helps in ways material items can’t. Couples tend to give each other stuff to express their devotion. They’d be better off giving the gift of time by spending money on timesaving things like a housecleaning service. Our calculation puts the happiness increase for such gifts at $4,000.

OUTSOURCING DISLIKED CHORES seems like an expensive extravagance, but in fact, the investment can be worth it. In terms of happiness, the decision is worth an annual income boost of about $18,000. Let’s play this out. Say you make $48,000 per year and could hire someone to buy and put away your groceries — something you hate doing — for $100 per week. That’s $5,200 per year, 11% of your salary. It seems unreasonable at first, but once you know the life-satisfaction boost, it suddenly seems very reasonable. Before investing in outsourcing chores, it’s important to identify the specific ones you dislike. Some people may enjoy cooking but hate the prep work. In that case, a meal kit service is a good investment. Others enjoy the feeling they get from cleaning the house, so outsourcing that task wouldn’t make sense.

CHASING DEALS usually isn’t worth the time it takes. Think of driving out of your way to save a few pennies per gallon on gas or comparison shopping between stores for an item you may save only a few dollars on. Or consider this scenario: You want to work from a coffee shop a few days a week, and there are two equally close to your house. At one, you will be left alone, and you’ll spend $20 per week on coffee and pastries. At the other, you’ll know the staff and chat with friends, but you’ll spend $60 per week. Which do you choose? The first one seems like a better option because you’ll get more done and spend far less money. But being more productive doesn’t mean you’ll be happier. You may get less done at the second shop, but the happiness increase is worth about $5,800! Even if you accomplish only half as much work at the friendly coffee shop, you’ll be much happier.

VACATION is the most egregious misuse of time. In our survey of working adults in the U.S., 75% of employees who got eight vacation days a year did not take them all, 40% used fewer than eight days and 31% took fewer than four days. If someone put stacks of money on a table and said we could take it, we wouldn’t walk away. By not using our vacation time, that’s effectively what we’re doing. In our sample, the mean number of vacation days used was nine. According to our analysis, taking eight more days a year is equivalent to a $4,400 increase in annual income. For many people, these days are available! All they have to do is use them.

FAMILY AND FRIENDS are worth a lot in terms of happiness. Shifting from working all the time and never seeing friends and family to spending time daily with them would be worth a $108,000 boost in annual household income. This example is theoretical, of course. But the calculation should give you an idea of just how much value your time can have. If you spend most of your time working in the hopes of getting a $20,000 raise, you may well get the raise. But your happiness increase won’t be nearly what it would have been by spending that time with friends and family. It can be hard to get your mind around this concept. But budgeting time carefully — as carefully as you would money — could pay off big for you, and your loved ones’, happiness.

Source: Harvard Business School Publishing Corp.

 

About the Author: smeenable

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