The Money Value of Time
One of the most basic concepts in financial planning is the idea of “the time value of money.” Because of the impact of investing and interest, an amount of money received today is valued greater than the same amount received at a future date. Add in the further complication of discounting for inflation, and you can see how the value of money fluctuates and how important this concept is to any financial plan.
But what about the money value of time? Can we place a monetary worth on our time, and would doing so have any impact on how we choose to spend it?
Time management is certainly not a new concept. Business gurus espouse on the benefits of spending a few minutes each morning to plan out your schedule and identify the day’s priorities. We hear about tips for addressing our most important projects first and for streamlining other, less urgent tasks.
But what most time management advice really boils down to is this concept of the money value of time. Your time is one of your most valuable commodities. And similar to having as asset allocation for investment portfolios, we have time allocations that demand regular reviews and rebalancing.
While not as straightforward as the exponential equation we input to calculate the time value of money, it may be worth taking a few minutes to reflect upon your time allocation. How are you currently divvying up your days? Are they spent on tasks that provide the most meaning for you and potential for growth, financial or otherwise?
If your time is currently out of balance, there may be a good explanation for it. You may be involved in an exciting start-up that demands exhaustive hours, working through a difficult divorce, or simply consumed with the holidays and everything that goes along with them. Like our portfolios, our time is not always balanced according to plan. But whenever possible, rebalancing our time can have long-term pay-offs. Spending the time to consider how we how we spend our time can actually help to preserve and protect one of our greatest assets.
But what about the money value of time? Can we place a monetary worth on our time, and would doing so have any impact on how we choose to spend it?
Time management is certainly not a new concept. Business gurus espouse on the benefits of spending a few minutes each morning to plan out your schedule and identify the day’s priorities. We hear about tips for addressing our most important projects first and for streamlining other, less urgent tasks.
But what most time management advice really boils down to is this concept of the money value of time. Your time is one of your most valuable commodities. And similar to having as asset allocation for investment portfolios, we have time allocations that demand regular reviews and rebalancing.
While not as straightforward as the exponential equation we input to calculate the time value of money, it may be worth taking a few minutes to reflect upon your time allocation. How are you currently divvying up your days? Are they spent on tasks that provide the most meaning for you and potential for growth, financial or otherwise?
If your time is currently out of balance, there may be a good explanation for it. You may be involved in an exciting start-up that demands exhaustive hours, working through a difficult divorce, or simply consumed with the holidays and everything that goes along with them. Like our portfolios, our time is not always balanced according to plan. But whenever possible, rebalancing our time can have long-term pay-offs. Spending the time to consider how we how we spend our time can actually help to preserve and protect one of our greatest assets.