How much is your leisure time worth?
Mint.com writer Matthew Amster-Burton recently posted a conundrum he was puzzling through. He'd just helped his daughter's school library raise money through a book sale. To organize it, he'd taken a week off work. He had a lot of fun. He got to spend time with his daughter and her friends. And he'd helped encourage kids to read.
The problem? The fundraiser brought in $150. If he'd just worked that week instead, he could have made a lot more money, which he could have then donated to the library.
So he was debating whether he'd done the right thing. As I told him when he asked me about it for the article, I didn't think this had to be an either/or situation. Perhaps he could have worked part of the week, and also brought in another parent to help out, thus giving both time and money.
But this issue gets at an interesting question many of us don't ask: how should we value our non-working time? What is its actual dollar value to us? And does it matter?
Over the past two years or so, as I've been researching and writing a book about money, I've read through a lot of personal finance literature. Many tomes don't seem to value leisure time very much. To be financially savvy, in your time off of work, you're supposed to hunt through coupon circulars, hang your clothes on a clothes line to dry, make your own soap and laundry detergent, or visit three stores in order to get the best deals.
I understand why this line of reasoning prevails. In the past, at least, it's not been very easy to turn spare time into money, so time outside one's normal job is basically given a value of zero. But this clearly isn't true. If it were, you'd accept a second job at one dollar an hour. After all, all you're giving up is leisure -- time to relax, to interact with your family, to exercise, to volunteer. Since most of us wouldn't take that deal, we must value free time more.
How much we value it is a complicated function of our income, how much we like our work or dislike it, what other priorities we have in our lives, and how much we're currently working for pay. Someone who's working very little may not value an extra hour of leisure very much. Someone who's working a lot of hours would value it a lot -- and hence might be willing to pay extra to get her dry cleaning delivered so she has time to go for a run.
The reason why this matters is that having a rough dollar value in mind helps you make smarter choices. If you value your leisure time at $30 an hour, then driving 15 minutes out of your way to save a few bucks on your dry-cleaning probably isn't worth it.
Unless, of course, you really like that particular dry cleaner, and enjoy saying hello to the owner every time you're there. You want to keep her in business. So you're willing to pay a premium -- much as the father in the school library example really did value what he was teaching the kids. Taking the time off to volunteer was worth more to him than he'd earn (although whether the library staff would agree is another matter). Some leisure time is worth more than others. But even if things are hard to put a value on, thinking this way can help keep us from wasting time on things that don't matter to us.
How much is your leisure time worth?
Photo courtesy of Flickr user laura padgett.
