How much is your time worth?

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How much is your time worth?
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In today’s fast-paced world, time is a precious commodity. That’s why outsourcing daily tasks is big business. But is there more to these services than dollars and cents?

Can paying someone else do your food shopping actually make you happier?

Think about the services we now have at our virtual fingertips: SHIPT (for groceries); Uber (for transportation); Hello Fresh and Blue Apron (for meal prep delivery); Wag (for dog walking); TaskRabbit (for things like putting together Ikea furniture and setting up electronics); and Amazon (for shopping for everything from home goods to apparel to power tools from the comfort of your couch).

Add on other decades-old services, like housekeeping, lawn maintenance, and home repair and upkeep contractors for things like painting walls and cleaning gutters. You see what I mean.

For so many of us, outsourcing is money well spent because it frees up one of modern life’s scarcities – time. It’s about reclaiming time to do the things we want, and paying someone else to do the rest.

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This isn’t a new concept; it’s a fresh take on an old classic. In the 1700s, economist Adam Smith put forth the notion that efficiency is a surefire way to business success. So, is “life efficiency” a path towards greater life success, or happiness? Intuitively, it seems like the answer is yes.

You don’t have to take my word for it. Science suggests that opening our wallets to save time may reduce stress about the limited number of hours in a day, and therefore improve our overall happiness. What’s more, folks who instead use their money to buy new material goods did not have the same increase in overall happiness and contentment.

In a recent research article published in the Proceedings of the National Academy of Sciences, author Ashley Whillans, a Harvard Business School professor, found that folks who spent money to buy themselves more time – by using services for everyday tasks like the ones above – reported greater life satisfaction.

The research was based on surveys of almost 4,500 people across the U.S., Canada, Denmark and the Netherlands. Results from the data showed that paying for services like delivery or takeout food, a cab ride, housekeeper help, and paying someone to run an errand resulted in decreased daily stress and increased happiness.

One interesting finding was that it didn’t matter if the respondents were wealthy or had lower incomes – everyone benefited from buying time, no matter where they fell on the income spectrum.

To me, it makes sense. Say you hire a housekeeper. That’s a handful of hours freed up from weekly cleaning duties that are now completely yours. When we put our money to use for us in this way, we turn time doing things we don’t enjoy into an opportunity to focus more on the things we love.

We are, in essence, buying ourselves more time, more freedom. And we can turn this purchased time and freedom into more happiness for ourselves.

Of course, we don’t have to outsource everything on our to-do lists. Some of us may enjoy grocery shopping and cooking, while others love working outside in our yards and gardens. We can take what we like and outsource the rest.

To determine if there is a direct cause-effect relationship between buying time and happiness, the researchers conducted another simple experiment. They provided study participants with $40 for two weekends to spend. The participants were told to either use the cash for material purchases or for outsourcing. At the end of the day after spending the money, these folks were asked to record their mood.

The result? Those who spent the money to save time reported reduced time-related stress and increased well-being. Those who used the money on material goods did not report those same feelings.

Ready to start outsourcing your life tasks? I know I am. Before you hop online to offload all of the day’s mundane chores, there is one important question to consider: When does it make economic sense for me to pay someone to do a task, and when is it better to do it myself? Or, put another way, just how much is my time worth?

Don’t break out the calculator just yet. There are plenty of online tools that help folks calculate exactly how much their time is worth. You can try one, or you could do a rough sketch, like this one from Tim Ferris, author of The 4-Hour Workweek, “If you chop three zeros off of your income and halve it, that’s roughly your hourly income. So, if you make $50,000 per year, you make approximately $25 per hour. For far less than that, you will be able to outsource nearly anything in your life that you dislike.”

The old saying goes, time is money. Why not figure out how much yours is worth and then decide when it’s worth it to hire help? If you’d rather binge on Netflix while the teenager next door makes $20 cutting your yard, do your thing. I’ll be at home waiting for my Instacart order while my housekeeper finishes up.

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Wes Moss About the author:
Wes Moss is the host of Money Matters – the country’s longest running live call-in, investment and personal finance radio show – on WSB radio. He is the Chief Investment Strategist at Capital Investment Advisors (CIA), and a partner at Wela, a digital financial advisory service. In 2014 and 2015, Barron’s ...Read more
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