Henry David Thoreau definitely said it best “The true price of anything you do is the amount of time you exchange for it.”
Learning a simple money mindset change like this can change your entire life.
Once we being to understand our purchases as it related to how much time we are trading away vs. how much money, we can better appreciate the true weight of our purchases and understand their actual costs.
We can save so much money being frugal, and save even more by being stingy, but our time is also worth money- we should still be able to enjoy ourselves and not spend all our time trying to make money and save money- or just spending it!
The True Cost of Anything
Let’s take a quick look at how much of our time we are giving away with some of our normal everyday purchases.
To keep things simple let’s use an average household income of $60,000 with a 40-hour workweek. So with our example, we are making ~$30 per hour.
Here is how many hours you would have to trade away at work in order to afford the following purchase.
Large Iced Coffee at Dunkin Donuts ($4) = 8 minutes of work
Pair of Jeans ($40) = 80 minutes of work
Coach Purse ($120) = 1/2 day of work
60″ FlatScreen LED TV ($600) = 2 1/2 days of work
Newest iPhone ($1,000) = 4 ⅕ days of work
Dinner at a restaurant for your family of four ($80) = 1/3 day of work
Dinner at home for your family of four ($15) = 1/2 hour of work
New Living Room Furniture Set ($2,000) = 1 week + 3 1/3 days
2020 Ford F-150 ($28,745) = 5 months + 10 days of work
2,500 square foot house (10% down payment, 30-year mortgage at 4%, $300,000 purchase price, total lifetime cost $464,048) = 7 years + 9 months of work
1,600 square foot house (15% down payment, 30-year mortgage at 4%, $180,000 purchase price, total lifetime cost $262,960) = 4 years + 5 months
Keep in mind, the amount of work needed for the items above is based on an annual salary of $60,000.
If your annual salary is $30,000, the time you would have to trade away would be doubled. If you make $120,000 per year, the time would be cut in half.
Also don’t forget to add in your daily commute, overtime, work trips, meetings, late-night emails, taxes, etc and this exercise becomes more and more powerful.
But don’t worry here is where the importance of understanding this time vs. money exercise comes to life.
Because we can choose to start using our time for far more precious and important things rather than material possessions.
It takes just 1 minute to hug, kiss, and dance with your spouse.
5 minutes to play a silly game with your kids.
10 minutes to tell them a bedtime story.
30 minutes for a family walk to get some exercise.
60 minutes to help your children with their homework.
2 hours per month to volunteer in your community or at your church.
The money we earn is ours to use however we would like. But it can be a powerful exercise to realize how much of our precious time we are giving away with each purchase we make.
TIME is our most valuable asset on earth. It is always fleeting and our lives are getting shorter by the minute.
We all need to remember we can spend our hours pursuing items of far greater value than material possessions.