Time vs Money

To me, being frugal is all about being in control of my life. Making decisions that leave me with enough money to live my life comfortably without the spectre of debt hanging over my head. Being frugal (and life in general for that matter) involves a lot of choices. One of the biggest I seem to face on a regular basis is time vs money.

Many of the things we all do to save money involve trading your time for money. Comparison shopping, keeping a price book, cooking from scratch, gardening, hanging laundry out on the line, making your own cleaners and laundry detergent all take time. Only you can decide in a particular situation which is worth more to you. But how do you compare the two?

One helpful method some people employ to help them conceptualize how much their time is worth is to compare it to their hourly take home wage.

Just for the sake of argument, lets assume that a person makes $30,000 a year approximately. That is around $14 an hour. I’m not sure exactly what all the taxes etc work out to, but again, just for the sake of argument let’s assume that take home pay winds up to be closer to $10 an hour.

For our first example, lets look at making your own laundry soap (recipe in this post). Once I have the ingredients on hand (the borax and washing soda only have to be bought about 1X a year) and using my food processory it takes me about 10 minutes of hands on time to make my own laundry soap. With the prices I quoted, I calculated $.12 a load for homemade, and about $.43 a load for Tide liquid with bleach. Lets assume the double batch of laundry soap I make lasts about 3 months, with approx 5 loads of laundry done each week. That is 60 loads of laundry times a savings of $.31 a load or a savings of $18.60.

So, in that example, 10 minutes of effort (worth about $2.50) can save me $18.60 or almost 2 hours of work outside the home.

For the second example lets say you have the option of cleaning your house yourself, which with vacuuming, mopping, bathrooms, kitchen and dusting would take about 3 hours of your time (again, a figure pulled from the air-it would depend on how clean your house is kept, how big, and how fast you do things) or $30. To pay a house cleaner might average about $50 a week (again-lots of variables). On the surface the most frugal thing is obvious-cleaning your own house is cheaper even if you take your “hourly wage” into account.

But what if you just absolutely detest vacuuming and scrubbing bathrooms? Or if you have physical limitations that make doing the cleaning uncomfortable or even painful? Well-then you have a choice. Is it worth you working 5 hours to have someone else do it for you. The answer to that question is purely up to the individual.

My mother, who is a nurse, has someone come in and clean her house. She says that to her it is totally worth it to work a couple of extra home healthcare cases a week to pay for it. She loves what she does for work, and she hates cleaning house. When she gets home, she doesn’t have to worry about the cleaning and can concentrate on the things that matter most to her.

This same method can be used to teach children the value of money. I remember reading in the Tightwad Gazzette that the author, Amy Dacyczyn, paid her children in chores a standard rate per job. I can’t remember now the exact amount-and she wrote it in the 80’s so the amount a person might choose today would be different due to inflation. Lets say that for every small job a child does (outside of their regular chores) they get a quarter. So each time they take the trash out (or take the dog for a walk, or weed the garden for 20 minutes or whatever) they get paid $.25. A standard rate makes it easier for them to compare the cost of an item with the amount of work it took to earn the money. When the child goes to spend their money, you have a way to talk to them about a comparison of time to money. Is a candybar really worth taking the dog for a walk 4x? Is that must have beanie baby you saw in the store really worth weeding the garden for 2 hours?

I would really enjoy hearing peoples opinions and comments on this.