personal finance

Money is time


I recently watched a science fiction film called In Time, in which people in the future are genetically engineered to stop ageing at age 25, when a one-year countdown displayed on their forearm begins. When the clock reaches zero, the person “times out” and dies instantly. 

In this society, time has become the universal currency, transferred directly between people or stored in “time capsules”. Due to a chance encounter the lead character ends up with 110 years of time on his clock, which makes him vulnerable to time-robbers. The story of the struggle between those with lots of time and those with little got me thinking about the value of time and how it affects our working and spending decisions. 

As they get older, many people waste the precious time they have left doing work they don’t enjoy or spending money on things that don’t improve their wellbeing. Academic studies have shown that people can boost their wellbeing by doing meaningful work and spending money to outsource tasks that they dislike, allowing them time for shared life experiences.

I had my own experience of this recently. I have several conifer trees in my garden that have become too large and which needed to be removed. I briefly contemplated hiring or buying a chainsaw and cutting down the trees myself. Then the reality of the physical effort, plus the possibility of serious injury or death, made me call the local tree surgeon. 

The fee was painful, but far less so than trying to do the work myself. And in addition to avoiding the effort and risk, it allowed me to use that time to do things that I enjoy and that are a better use of my time.

In addition to the need to earn money to fund our lifestyle, we can also be lucky enough to derive purpose and meaning from our work — something that evidence suggests is essential to living a fulfilled and flourishing life. 

In his brilliant book, Bullsh*t Jobs: A Theory, anthropologist David Graeber argues that most service sector jobs serve no real purpose and the net result is that “economies around the world have increasingly become vast engines for producing nonsense”.

Graeber, a professor at London School of Economics, defines pointless work as “a form of paid employment that is so completely pointless, unnecessary or pernicious that even the employee cannot justify its existence even though, as part of the conditions of employment, the employee feels obliged to pretend that this is not the case”.

Graeber contends that doing a “bullshit job” can have a negative impact on one’s happiness and wellbeing, because such jobs lack meaning and stop people from doing other more useful and fulfilling activities.

When you are young you might be able to put up with a pointless job, but only if you live simply, save a lot and build some financial capital, so you can do what you want when you are older. If you numb the pain of an unfulfilling job by spending all your income on distractions such as travel, your financial wellbeing may be built on sand. 

Whenever you spend money on discretionary or fun things you need to ask yourself this question: what can I not now do as a result of spending this money on this thing now? Will it make me less financially secure, resilient and adaptable and is that price worth paying for the initial excitement or benefit?

Henry David Thoreau, the 19th century American writer and philosopher, said: “The cost of a thing is the amount of life which is to be exchanged for it.” And as we all only have a finite amount of life left, we need to be clear about the true cost of using that time to earn money to fund vacuous lifestyle spending and other expensive distractions. 

Time cost doesn’t just mean the hourly or daily income you need to earn to fund the purchase, but also the associated costs of doing your job. Say you work 160 hours a month and your take home pay is £3,500 (roughly £60,000 gross a year). You might think your time is worth £22 an hour (£3,500/160). 

To get the true picture, you need to factor in the associated costs of and time taken on activities like commuting or travel to and from childcare. Say that these associated costs all come to £1,700 and take up about 50 hours a month. Your real hourly rate is £8.57 (£3,500 – £1,700) / (160 + 50) — only slightly above the national minimum wage.

You can now more accurately calculate the time cost of your spending. A £3,000 holiday costs 350 hours of your time, a £150 handbag costs 17.5 hours and a £60 meal out costs 7 hours. Is the time cost, particularly if you do an unfulfilling job, worth it?

High financial wellbeing comes from making effective and interlinked earning and spending decisions, which are aligned to your core life values. Other than meeting your basic survival needs, every other working and spending decision is a choice and comes at a cost in terms of your time and satisfaction in life. 

Life is for living, whether that is nurturing existing friendships or developing new ones, having interesting experiences, doing useful work or indulging your interests and passions. 

Don’t waste a single hour or day of the rest of your life. You won’t get a second chance. Tempus fugit — so grab it while it’s here.

Jason Butler is an expert on financial wellbeing and author of “Money Moments: Simple steps to financial wellbeing”; Twitter: @jbthewealthman





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