You’ve heard the adage that “time is money.” Depending on the context, the person saying it was probably implying that their time is valuable and they don’t like wasting it, or they may have been trying to draw a parallel between time and money as an illustrative concept.
For most of us, the adage rings true on a superficial level. There are only so many hours in a day and so much money in our paychecks, meaning both resources are finite. Most people agree that more time and more money are both good things, and we have to budget each carefully if we want to get the most out of life.
But how do these concepts really compare, and how can we use that information to better our lives?
We can start seeing the relationship between money and time by studying how much money people would be willing to spend for an extra hour of sleep each night. Most people don’t get enough sleep because of other time constraints, whether it’s studying, working, or parenting. Having that extra time is a luxury most people would be willing to pay for. On average, “early birds” who prefer getting up early would spend just $5.94, on average, for an extra hour of sleep per night, while people who feel exhausted chronically no matter when they go to bed would pay $10.55. Clearly, the more we feel we need the extra time, the more we’d be willing to pay for it.
Multiple studies have found that people who have been paid hourly tend to apply mental accounting rules to time in the same way they apply them to money. For example, if they have a list of chores to do on an off day and a limited number of hours to accomplish them, they might establish a strict timeframe for each task, or they might weigh the economics of paying someone else to handle a chore compared to the time it would take them to complete it on their own. Being paid hourly forces people to value their time expenditure, which leads to more economic decision-making in other time-related contexts.
Research suggests that people are happier when they spend money on experiences, rather than on material possessions. They spend more time anticipating the experience to come than they would, say, waiting for a package to arrive in the mail, and when they get what they paid for, they have stronger memories of the time they spent with an experience. The irony here is that many people would still prefer to spend money on possessions, since they view experiences as fleeting, and possessions as something that will continue returning value indefinitely.
One study published in PNAS found that across demographics, people felt good when spending their money on services that saved them time. For example, let’s say you know how to change the oil in your car, and it takes you two hours to do it, or you could take it to a 30-minute shop and get the job done for $30. Unless you particularly like working on your own car, you’ll probably feel good spending the money, since it saves you time you can use to enjoy yourself.
Another study found that when participants were asked to assign a dollar value to their time, they were unable to enjoy time-based experiences as much. What’s interesting here is that it didn’t matter how much value they assigned to their time; the people who rated themselves as worth $15 an hour had similar effects as those who rated themselves worth $400 an hour. The key factor was assigning a dollar value to their time, which made experiences like listening to music or watching a movie inherently less enjoyable.
Further research suggests this effect might be due to the fact that as we start assigning dollar values to everything in our lives, including time, it reinforces how much we value money. Eventually, money is the only thing left to value, since it’s what we use to evaluate everything else. It’s hard to focus on the merits of a movie or symphony when you’re reminded that every minute you spend comes with a price.
So what can you take away from all this information?
Over time, we tend to start valuing time in terms of monetary value, but this isn’t always a good thing. Obsessing over how much our time is “worth” can make us even more obsessed with money and material goods, which ultimately have lower happiness returns than experiences, and may decrease our appreciation for even the pleasant things that take up our time.
While it’s good to know your hourly worth if you’re an entrepreneur or freelancer, and it’s good to avoid wasting time, you should also think of time as a resource distinct from money if you want to maximize your satisfaction with life.