The money value of time
Often you hear about the time value of money. That is, money tied up for a period of time has a missed opportunity cost. It also has to do with inflation – $50 today is worth far more than $50 willbe worth in 10 years, in terms of buying power.
Something you don’t hear about as much, especially in the personal finance world, is the Money Value of Time. As I was listening to the Consumerism Commentary podcadt, I got to thinking, as I often do, about frugality vs time. Many frugal tips pushed involve spending outrageous amounts of time, to save what may be a negligible amount of money.
Don’t misunderstand me – the family with $40,000 in credit card debt may well benefit from making their own laundry detergent, or making their own soap from scratch. But those of us who aren’t in that boat really need to think long and hard – is it worth spending all that time?
Remember – you can make more Money. But you can never make more time. Would you rather spend that time with your family, or starting a business? Maybe there’s a hobby that you would like to take up. Think about it.


May 3rd, 2009 at 8:40 pm
Sometimes you have to sacrifice in the short term to change your behavior and patterns, so that you can win in the long term. The time you invest can radically change your family tree, life, and direction. That is important.
With that said, it can be easy to lose the wealth forest for the frugal trees. Frugal tips are ‘easy’ and produce very tangible results, while earning more income, educating yourself, and motivating yourself are often much harder and take longer although they will produce more results over a lifetime.
May 4th, 2009 at 7:54 pm
Sacrifice isn’t always bad, don’t get me wrong. Especially if you’re in a really bad situation. At times, going the ultra-frugal route is the best choice.
But once your situation improves somewhat, it may be time to take a breather, and enjoy life a little bit.