海角大神

What is an hour of your time and energy worth?

In simplest terms, an hour of your time is worth whatever you鈥檙e paid for an hour鈥檚 worth of work at your job. After all, you鈥檙e repeatedly willing to spend your time and energy at that rate, so it must be an exchange rate you鈥檙e happy with.

In fact, that鈥檚 a pretty good metric to apply to the rest of the time that you have.聽If there鈥檚 a frugality tactic that can earn you a better hourly rate than what you make at work, why wouldn鈥檛 you do it?

Here鈥檚 an example of what I鈥檓 talking about. Let鈥檚 say I can make a batch of laundry detergent in fifteen minutes that, after expenses, saves me $6 over the store brand. Since I need laundry detergent, I end up saving about $24 for every hour of my effort.聽

Another example is making bulk meals in advance. If a meal costs me $6 to assemble, but if I assemble four at once, it costs me only $5 per meal, resulting in the extra time I spend assembling them saves me $3. It might take me an extra half an hour to do it, but it鈥檚 an even better deal because I鈥檒l get the time back later when I have easy-to-prepare meals in the freezer.

You can make comparisons like this with almost any frugal task you take on.

If you find that preparing a grocery list saves you an average of $20 per grocery store visit 鈥� which is a reasonable amount for a well-considered grocery list to save you 鈥� and it takes 45 minutes to prepare it, then you鈥檙e saving $26.67 per hour spent assembling grocery lists.

If you spend an hour making your own homemade dry soup mixes that cost two dollars less per mix than the ones at the store, but you make twenty of them 鈥� enough for the whole winter 鈥� you鈥檙e saving $40 per hour.

The time you spend at home on frugal tasks directly converts into money saved.聽It鈥檚 a direct conversion, one with an hourly rate you can calculate if you keep track of the time invested and the money saved on the item.

For me, I shoot for an hourly rate of $10 to $15 (depending on the task) when I鈥檓 doing something by myself, or a rate of $5 if it鈥檚 an activity I can do with the kids. I鈥檒l usually try an activity once and calculate the hourly rate of my savings and if it鈥檚 around the $10 mark (or around the $5 mark if I can do it with the kids), I鈥檒l make sure to keep it in the repertoire.

Do this calculation regularly, and you鈥檒l also find yourself with a useful tool for deciding if a new frugal activity is worthwhile enough for you. If you鈥檙e just not saving much money for an hour鈥檚 worth of effort, there鈥檚 almost assuredly a better way to spend that hour.

A frugal task that cuts your expenses by a certain amount is just as good as working for that money聽鈥� or, arguably, better since you don鈥檛 have to pay taxes on the money you save with frugality. Calculate up how much you save for a task, compare it to what you earn at work, and you might have yourself a new appreciation for frugality.

This post is part of a yearlong series called 鈥�365 Ways to Live Cheap (Revisited),鈥� in which I鈥檓 revisiting the entries from my book 鈥�365 Ways to Live Cheap,鈥� which is available聽at Amazon聽and at bookstores everywhere.聽