Sunday, October 12, 2008

How much is your time worth? Go ahead, calculate

Should you spend extra money on petrol for your car and get home faster or should you stick to public transport which is cheaper, but which means you get home an hour later? Given a choice, which job would you opt for- a high stress job that offers a bigger pay check, or a lower paying job that allows you to balance work and life? Would you put in overtime at work to impress your boss and bag a promotion, or would you rather sacrifice the opportunity to help your child pre pare for an important exam? Which is more important to you, time or money? On a second thought, have you ever thought about how much your time is worth?

Each day we find ourselves being pulled in different directions, with conflicting needs and wants crying for our attention. Work priorities, life commitments, personal needs and desires, friends and family- all need our time and consideration, but with only a limited amount of time to spare, how do you ensure that you are able to prioritise, do justice to all those requirements, and to yourself too?

A simple computing of how much your time is worth can help you understand the value of it, showing how you can be more productive, more efficient, manage your time better and get more value for it. Here is how to go about it.

Start with the total gross income you have earned from your job for the past year. From this, subtract taxes straight away. Then deduct additional expenditure incurred by you on account of the job. This can include rent, living expenses (if you have relocated to be closer to the job), childcare, work related expenses and bills, petrol and vehicle maintenance, office supplies, even the amount spent on your work wardrobe and doctor’s expenses if the job is stressful. This gives you the actual income you get from your job.

Calculate the number of hours you work each year. This not only includes the number of hours you devote to actual work, but also the time you spend commuting to work, meeting clients, speaking on the telephone and other job related activities.

If you don’t have an exact estimate of the time, log the time you spend on each activity for a week and multiply that figure by 52 to arrive at the yearly total.

Divide your net annual income by the actual amount of time you have devoted to the job. This is what each hour of your time is worth. The figure can come as a shock for most people, but it has a way of putting things in perspective.

This simple computing helps you to work out whether or not it is worth to do a task yourself, delegate it, or simply not do it at all. If you spend a lot of time doing low-yield jobs, then you can streamline and manage your time better by employing an assistant or giving it up altogether.

When spelt out in black and white monetary terms, it is easier to rationalise a lot of otherwise confusing decisions. If, for example, your job is making you good money, wouldn’t you rather you spent an hour working, than frittering it way chatting or checking your email? If on the other hand, your job makes you miserable, then perhaps you may wonder if you would be better off trading it for something that pays less, but leaves you feeling healthier, happier and more satisfied. You can even use this figure as a benchmark to compare against when accepting an offer. When the value of our time is converted into measurable monetary terms, we tend to respect it more, and are more careful about how we use it.

There are only 24 hours in a day and 365 days in a year. And you still need to spend a fair amount of time eating, sleeping and taking care of your basic living needs. After all this, you will be left with very little productive time, and it is important that you put it to maximum use. Time and tide, as they say, wait for none.

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