Have you ever heard someone say, “It’s just not worth my time”? I’ve said it before and I’m pretty sure you have too. But, have you really thought about it? Is it literally worth your time? Do you even know what your time is worth? I’m going to help you figure out the answers to these questions and help you save more in money, without even realizing it.
I thought of this topic the other day when my wife and I were driving to a wedding. I asked myself the questions, “Should I have flown? Is it worth my time to drive or fly? What’s really the more expensive option?” Looking at just the cost of a plane ticket vs gas for driving, driving is almost always the cheaper option. However, there are so many more factors that I should consider.
Let’s simplify things and look at it more generically as an action. Is that action worth my time? In my case, the action would be driving or flying. With action is better? I want you to start by considering only two things: 1) the cost of the action (e.g. gas and food), and 2) your hourly time rate. There are a lot of other factors you could consider, but focusing on these two will cover the bulk of the cost.
We know now what to focus on to see if the action is really worth your time. I’ll use my fly vs drive actions as an example. The first thing I did was estimate the cost of driving vs the cost of flying. I kept things simple and focused on gas+food for driving and ticket+food for flying.
Driving cost estimate: $80 for gas (2.5 fill ups), $60 for food = $140 estimate
Flying cost estimate: $320 per ticket round trip x 2, $0 for food (we can go without) = $620
From the looks of it, driving is the way to go. But, we haven’t considered the worth of our time. First, consider the time it takes to do both actions.
Driving time: About 14 hours
Flying time (including check-in, layovers, etc.): About 5 hours
Time difference: 9 hours
So, if you flew instead of driving, you would save 9 hours, but what do you do with this information? You start by figuring out your hourly rate (or in my case, my and my wife’s combined hourly rate). If you get paid hourly, that’s your hourly rate. Easy. If you get paid by salary and work normal 40 hour weeks, just divide your salary by 2080 to get your hourly rate. If you get paid irregularly, add the amount of money you made across your last 5 pay stubs (A). Then, add the amount of hours you worked over your last 5 pay stubs (B). Now, divide what you got in A by B (A/B) to get your hourly rate. Lastly, if you’re doing this with a spouse, add your hourly rate with theirs to get the combined hourly rate.
I’m going to use some made up numbers here, but let’s say my wife and I had a combined hourly rate of $65 per hour. Going off of our example before, we would save 9 hours by flying. So, 9 x $65 is $585. In other words, flying would save us $585! Or said differently again, driving would cost us $585 more. How? Let’s assume we flew and we gained 9 extra hours. If my wife and I both then worked those 9 hours at our respective jobs, we would have made a combined $585. Let’s now look at our new estimate:
Driving Estimate: $140 cost + $585 in our time = $725
Flying Estimate: $620 cost + 0 in our time (we already subtracted this out) = $620
Now flying is the better option. This is simple and can cover most action comparisons, but you could also consider more factors. For example, if you could do some work remotely, you could work during your flight to save even more money. You could also consider the wear on your vehicle (your car loses an average of $0.11 per mile in value). We traveled 700 miles, so that would make the driving estimate $77 more, or $825. But, I like to just focus on the major factors, as all the minor factors end up offsetting. Focus on whatever you feel comfortable with.
If you go with this method of analyzing whether it’s really worth your time. Then, you have to understand, you need to work the time you saved. Using the above example, if my wife and I chose to fly and save 9 hours, but we didn’t then work those 9 hours, we would be out $585. Now our Flying estimate went from $620 to $1205 and our driving estimate dropped to $140. You can see, if my wife and I didn’t work the 9 hours we saved, we would have lost almost $1000.
Ultimately though, your decision shouldn’t be driven solely on numbers. For example, to my wife and I, flying is so much more convenient. We would be happy to pay a little more for this convenience. It’s also safer to fly than drive. On the flip side, driving gives us the advantage of having a car once we get to our location, which is very valuable. You should see my point by now, sometimes the decision isn’t solely based on numbers, but you should definitely rationalize your decisions based on those numbers.
I hope you enjoyed reading the Better Budget blog! If you want help calculating your hourly rate or figuring out if one action is more worth your time than another, please message me. As always, I hope your personal finance journey will get better every day!
Better Budget Co
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My name is Corey and I have a passion for budgets and personal financing. I can talk about it for days (weirdly enough). Hope you enjoy the blog!
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