We’ve all heard the saying, “time is money.” It’s a concept that’s deeply ingrained in our work-oriented society. The idea is simple: the time you spend doing something could be used to make money. Therefore, if you can pay someone less than your hourly rate to do a task, you should. But is this always the best approach?
Let’s say you make $200 an hour. If it costs less than that to have someone else do a task, then it makes sense to pay someone else to do it, right? This line of thinking is logical to a point, but it can also lead to what’s known as lifestyle inflation.
Lifestyle Inflation: The Hidden Cost
Lifestyle inflation occurs when your spending increases as your income increases. It’s a subtle trap that can lead to a dramatically higher cost of living. For instance, you might start outsourcing tasks like house cleaning, landscaping, and car washing. While this might save you time in the short term, it can inflate your expenses over time.
The Value of Non-Working Hours
While it’s true that you might make $200/hour while you are working, you are not making that when you aren’t working (unless your income is all passive). On the weekend, that hour of time is not worth as much as that hour on a workday when just considering income.
The Tradeoff: Skills and Self-Sufficiency
Another tradeoff to consider is the potential loss of skills. By always paying someone else to do tasks like painting your walls, you can get rusty at that skill. This loss of self-sufficiency can have long-term implications. Not only could you end up paying more in the long run, but you also lose the satisfaction and independence that comes from doing things yourself. On the other hand, by doing things yourself, you will get the satisfaction of seeing the fruit of your labor.
The Cost of DIY: A Cautionary Tale
It’s also important to consider your ability to do the task at hand. For example, I once attempted a plumbing job and ended up having to spend $1,000 more to repair what I broke. This experience taught me that sometimes, the cost of doing it yourself can be much higher than anticipated, especially when things go wrong.
Opportunity Cost: Time, Money, and Sacrifice
When deciding whether to do a task yourself or hire someone else, consider the opportunity cost. How long will it take you to do the task, and what are you giving up by spending the money on having someone else do it? Could that money be better spent or saved elsewhere? These are crucial questions to ask yourself.
The Paradox of Time and Money
Interestingly, sometimes attempts to trade money for time can end up costing you more of both. For instance, I can prepare, cook, eat, and clean up a delicious steak in less time than it takes me to drive to a restaurant, wait in line for a table, wait for the food to be cooked, eat, and drive home. So, in trying to save time, we sometimes end up spending more time and money. Of course, there could be other factors at play, such as not wanting to clean up, preferring the taste of restaurant food, or enjoying the social aspect of dining out.
Time: More Valuable Than Money
It’s important to remember that time is more valuable than money. You can always make more money, but you can never make more time. And unlike money, you can’t really save time—it is spent whatever you do. As the book Four Thousand Weeks: Time Management for Mortals eloquently puts it, we have a finite amount of time in our lives, and how we choose to spend it is one of the most important decisions we can make.
The Balance: Time, Money, and Quality of Life
Of course, there are other factors to consider, like time to recharge and time with family. The “time is money” concept doesn’t account for the value of these intangible aspects of life. It’s essential to strike a balance between making money, saving money, and living a fulfilling life, and it is perfectly fine to spend money on having people do tasks you prefer not to do, as long as it fits within your budget..
While the “time is money” concept has its merits, it’s only part of the equation. Consider the hidden costs, the value of non-working hours, the importance of maintaining skills and self-sufficiency, the potential cost of DIY disasters, the opportunity cost of spending money on outsourcing tasks, and the paradox of spending more time and money in an attempt to save time. Remember, being frugal isn’t just about saving money—it’s about making the most of your resources, including time.
Eponymous 