This is a guest post by Joel Runyon of Impossible HQ.
Did you see the Justin Timberlake thriller In Time last year? Probably not. Nobody else did either. Well, I did, I guess. And while the movie wasn’t very good, it contained an interesting idea that I think relates to personal finance.
The movie’s plot revolves around a world where everyone is genetically engineered to live until they’re 25. After that, they have exactly one year left before they die. The amount of time they have left to live is displayed on their forearm and because of how limited of a resource it is, people use time as the method to barter and exchange things with each other. Time becomes a currency. Want a cheeseburger? That’s twenty minutes. Bus fare? Two hours. You get the picture.
If you can get past some overly-cheesy acting moments from Justin Timberlake, the movie makes an interesting point about the importance of valuing your time. While it’s easy to waste five minutes here and there in your day-to-day life without realizing it, in the movie people are acutely aware of just how much time they have left. It’s marked on their forearm after all, and they weigh all of their decisions on whether or not the trade-off is literally worth their time.
Interestingly, the most successful people I’ve met in Real Life treat time with the exact same care. They value their time more than anything. More than their Stuff. More than whatever is in their bank account or 401(k). Time is the most precious resource because once you spend it, you can’t get it back.
When you value your time, you begin to evaluate your decisions through a completely different lens.
Take the choice between two very similar jobs. Maybe at one you can make $40,000 working down the street from your house, and at the other you can make $50,000 by working somewhere that’s half an hour away. Most people would think it’d be a no-brainer to take the $50,000 job simply because of the pay increase. After all, everybody has a commute, right ? Besides, it’s $10,000, and we all know that more money is better, right?
Well, maybe.
Let’s do the math. If you have a 30 minute commute, every day you’ll spend about an hour in the car (five hours every week).
With 50 weeks in the year (assuming you take your 2 weeks of vacation that most Americans don’t take advantage of), you’ll spend around 250 hours every year in the car — just over ten days — not counting any traffic delays you might have.
If you value your time at $25/hour (~$50,000/year salary), over the course of the year you’ll be spending $6250 worth of your time commuting, most likely being stressed that whole time. When you add the wear and tear on your vehicle, the trade-off begins to sound very different than it did at first.
This isn’t even factoring that the average American spends almost $4,155 a year on gas alone. Even if you only can attribute 60% of your gas costs to work, that’s still $2,493 in gas you’re spending just to appease the $50,000/year job requirements (namely, showing up).
However, if you took the job closer to home, you would save $6,250 in the value of your time as well as $2,493 in gas over the course of the year. So, while the perceived pay gap is $10,000 at first, the actual pay gap between jobs when accounting for the value of your time and added gas would be about $1,257/year. This $1,257 is 2.5% of your $50,000 salary. With that in mind, the question becomes much, much different. (And keep in mind that we still haven’t discussed the opportunities to create additional revenue from the 250 extra hours you’ll have every year!)
Are you wiling to take a 2.5% pay cut to spend more time at home? To do more of the things you enjoy while spending less time getting being stressed? Or, to put it another way: Is a year’s worth of time, stress, and sanity worth $1,257?
Obviously there are some other factors that we still haven’t accounted for.
- Even if you worked closer to home, it would take some time to get to work.
- Do both jobs offer the same opportunities down the road?
- Are they both equally compelling career options?
The comparison isn’t perfect, but it’s not supposed to be. It’s supposed to make you think. How do you spend a currency like time, one that isn’t measured in dollars and cents?
I’m not saying you should throw away your car and quit your job tomorrow. But if you begin to factor in items that might seem less tangible than money, you might start to make decisions based around the quality of your overall life experience, not just the numbers that show up on your bank statement every month.
Joel Runyon spends his time pushing his limits, telling a great story with his life by pursuing the impossible. You can download his first manifesto on living a great story, IMPOSSIBLE, for free. Follow him on twitter.
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I call spending/not earning money in the interest of saving time a convenience tax. Sometimes it’s worth it, sometimes not.
In this example, I’d take the job closer to home because I hate commuting and if it were close enough I could ride my bike or walk, which would count as gym time. However, I have a friend who’s a doctor and the ONLY free time she gets to return phone calls, listen to audiobooks, etc, is during her commute, so she would probably take the job farther away.
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I would absolutely take the job closer to home because quality of life is worth a lot to me. There is an inverse to this story, though, and that’s where you choose to buy/rent your home. My husband and I bought our first home last year and we paid slightly more for a location that is a five minute bike ride to my office. Sure, if we’d lived out in the suburbs we could have bought a big, sprawling house with a yard (which we don’t really want anyway), but location close to work was the most important concern. If we lived in a bigger city and couldn’t afford to buy in a central location, there’s no doubt that we would choose to rent a tiny apartment close to work rather than commute every single day.
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I totally 100% agree, and am in fact currently living in a tiny apartment in a really great part of town. I have a five minute walk to work, and my partner has a 30 minute walk or a 15 minute bus ride (although, ironically, I need a car for my job in order to do home visits… but they pay mileage so it’s all good!). We were actually just talking the other day about how we never want to move out to the suburbs and have to commute. I’ve never really had to commute before, but sometimes, because I have to drive places for work, I’ll be on the road during rush hour, and it’s so hard to understand how people can stand it.
We’re content living in our cozy apartment, and would only want to buy a house if we could do so in the part of town where we are now. But with the price of houses downtown, and the size of the debt we’re paying off, I really don’t anticipate that happening anytime soon! It’s all good though… small space living is actually something we’ve grown to enjoy.
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I just did this. It hasn’t been long enough to know if I did the right thing, but just the ability to leave the house after 7, instead of right at 6am, is great.
Bringing in another recent topic – this is why I have an emergency fund. If the new job doesn’t work out, I am not stuck – I have options.
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The only resemblance to Logan’s run is that people have a limited, state-mandated lifespan.
The Geek in me made me type that.
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Never forget though that relaxing and “doing nothing” during your day is important and is doing something for you. It’s good for you. So when you start doing comparisons on time and money, don’t forget the health value of just sitting and doing nothing!
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Yes! I work from home, and my doctors visits went down to zero overnight. Now, when my work day is done, I can go relax on the couch, rather than commute.
Also, I now have time to cook dinner in a reasonable amount of time. Before, I was rushing to get anything on the table, and if the train was late, or there was traffic, I usually ordered out.
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Exact same situation for me. I never want to go back to commuting to an office. Ever.
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Oh, goodness, yes. I commute 45 minutes one way for a physically and emotionally draining job with violent children/teens and often pick up some sort of fast food to bring home for dinner.
The crazy thing is is that I originally took the job at a local school to support my hobbies, have more family time, and to have insurance, but I’ve been transferred to different locations where my particular skillset is deemed essential to the point where I no longer have time for the hobbies that I’m supporting or the family. Factor in the cost of gasoline for commuting, the professional wardrobe, and the costs for an unhealthy diet and the job is hardly worth the paycheck.
I hadn’t even factored in the value of my time spent commuting. Being under constant stress probably can’t be good for me, either.
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Great post, Joel. I’ve talked with my friends about this for a long time, but I value time far greater than anything else. You can always make more money and have more things, but time is finite. The clock is ticking and there is nothing you can do you stop it.
It’s interesting you actually turned the time spent on something into a monetary figure. Since I’m not ultimately motivated by money, it doesn’t really resonate with me but I like the concept.
Frankly, I value my time with my wife, friends, and family and there is no amount of money (other than what’s necessary to make a small living and live life) that I’d take to give that up.
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I actually thought the movie was quite well-done. I even liked that all the poor people were skinny (because they couldn’t spend much “time” on food, and because they ran everywhere), while the “rich” people were fatter (because they had hundreds of years of excess time they could blow on decadent food, and were never in a hurry to get anywhere).
Little touches like that went unnoticed by most viewers, but I appreciated such attention to detail.
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I liked the movie too. I thought it was smart. The Bourgeois and proletariat. The capitalist, social production and the laborer. Time happened to be the currency in the economy portrayed. It could have been anything taken for granted, really (water). “Time” just made more sense and was pretty cool as it was registered on the arms. This post takes that point and stretches it further into a relative value. I did appreciate the imposition of inflation in the film. Sad to say, I didn’t pay attention to the rich heft. Great observation Kevin!
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Certainly an interesting thing to think about, to be sure! It’s interesting how this balance chances throughout our financial journey. My first job out of grad school I choose to commute because it allowed me to stay in the shared townhouse I was living in for a long as I could. It was exhausting for a while there, but it freed up the cash to start an emergency fund and save up for an apartment.
Now that I’m debt-free and have a store of cash, I debate whether to start a side gig or keep time free for socializing, networking and dating. I’ve worked two jobs at once before and my social life suffered. I’m concerned that more work is going to make my work/life balance worse, not better.
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I actually really enjoyed the movie but I am not very critical either. It was a very interesting concept but definitely has a correlation to real life. I try to factor time into a lot of my decisions but I don’t always Puck the most time optimal choice. I can’t get paid for an extra hour at work because I am salary so my outside work time doesn’t translate to my hourly rate.
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The concept of “how much my free time is worth” is only valid when you actually make money in your free time. Otherwise, you’re simply making less money.
The example described in the post is invalid. If you took the $40k job and save an hour of commute a day, you won’t be making extra $6250/year. It’s a free time with no pay. Your cash difference is still $10k/year (minus gas). The valid question could be “how much money are you willing to give up for more free time”?
Posts like this one make people think that if they work less they’ll make “more per hour” which is totally incorrect.
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That’s correct! This is, as Jacq would say, NINJA time
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Part of your comment reminds me of something my mom dropped on me once. She got overcharged by 50 cents for something at the grocery store, and (this was so embarrassing for my 17 year-old self) she actually went back inside the store to get her change back. I said, “This isn’t worth it. It’s going to take at least 15 minutes. You make way more than 50 cents in 15 minutes at work.” Her response: “Yeah, but I’m not at work.”
…still think it was kinda silly though.
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While it’s true that the extra time you’re saving isn’t at work so you won’t be making extra money, I think the overall argument is that you would value that extra time to relax, be with family or do something else like it was worth something. How much is an hour with your family compared to an hour at work. You’re not making money when with your family but it’s valuable and putting a monetary value on it makes it easier to compare the two. If you don’t think about your time with them as having monetary value there’s little to stop you from spending all of your time at work and that sounds terrible!
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I work from home, and have been offered 20k-30k more to work in an office an hour from my house. It’s not worth it. My quality of life is much higher as it stands now.
– I’m not stressed out by the commute.
– My car barely uses any gas these days, and has almost no wear and tear.
– I don’t have to take time off to do things like go to the doctors. It can be done on my lunch break.
– If my kids are sick, I’m already set up to be at home with them.
Even besides the perks of coding in my pyjamas, I would have to be offered much, much more to start commuting again.
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I think the argument that if you are not using your time to make money then your time is worth zero is equally inaccurate.
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I am almost at the point where I would be willing to take a pay cut to work fewer hours and have less stress at work. I think in about 3/4 years when our house is paid off, I will be there.
Time is worth a lot to me, especially time with my kids! It is the most precious thing in the world.
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This article addresses an important concept. I often gauge the value of a good or service in terms of what it will cost me in “time”. As an example, twenty dollars doesn’t necessarily sound like much until you realize that you would be spending the equivalent of, say, two hours at your job of digging ditches in the hot sun at $10/hr. At that point, twenty bucks becomes much more precious and likely won’t be blown on something frivolous.
As a recent example, I recently went to a local blueberry patch to pick a years’ supply of blueberries for the freezer. I knew I had two hours before they closed. My goal was to bring home approximately 15 pounds of berries. I knew I could pick approximately 5 pounds of berries per hour based on past years. I therefore planned on picking about 10 pounds in my two hours and buying about 5 pounds pre-picked. Prices were $1.20/lb for u-pick and $2.50/lb for pre-picked. This meant that by picking 10 pounds myself rather than purchasing them pre-picked, I would be saving about $13, the equivalent of $6.50/hr. Coupled with the experience of picking the berries myself (I grew up picking mulberries, raspberries, blackberries, and strawberries in our backyard with my siblings), I determined that this was an acceptable return on my investment of my time. However, due to extreme heat and drought conditions here in SW MI this summer, the berry picking this year was extremely poor. I was only able to pick 4 pounds in the entire two hours, leaving me to purchase the balance of 11 pounds to reach my goal of 15 pounds. Doing the math after the fact, this meant that I only saved $5.20 by picking the 4 pounds myself. That translates to $2.60/hr, which did not provide an acceptable return on my investment of two hours.
I often use these same types of calculations when determining whether to tackle an auto repair job myself or whether to take it to my mechanic. Typically if I believe I can save about $10/hr by doing the job myself, I will. Any less than that and it’s a job for my mechanic, budget allowing
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This is a great breakdown – but one must then ask – how enjoyable was the time spent picking blueberries?
I have just this year started a garden – it’s a total farce that it will EVER break even cost wise. Especially if I compare my time to what I make at my regular job (at which I’m not full time – so the comparison is fair if I wanted less time I could go full time).
But…. and this is a big one….
the look on my child’s face when she realized that soon SHE could be picking the tomatoes that we would be eating that night. Priceless!
There are some things that one cannot put a price on – car maintenance and basic home repairs are now something that I gladly get paid a ‘pittence’ for because the sense of accomplishment is different that what I get from my regular job which is very abstract.
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If it makes you feel any better, I paid $4/lb for blueberries at the store this weekend. So you still saved a bit by driving to the patch rather than the grocer.
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Great thought! It boils down to “what do I want to do with my time?” If I use to earn extra money, then monetizing time makes sense. However, if I want to just hang with family and friends, then it becomes a lifestyle value choice.
There’s another extreme area where this comes in: driving. Am I the only one who gets annoyed when someone turns into the street I’m driving on, only to then hold me up because they’re driving slower than me? Or when someone cuts in front of me on the freeway? But… think about it: how much is that really costing me? 10 seconds? The most is two minutes, which is the longest traffic light cycle time. Now what exactly am I going to do for the first 90 seconds when I get home? And is THAT worth the frustration?
What we do with our time is often not all that productive. But your point that we lose it and never get it back is certainly a good perspective.
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this! I commute partly by bicycle, and it is amazing the number of people in cars who will threaten my life if I cost them ~4 seconds. Are those 4 seconds really worth a life? To some, it seems they are, but if more people thought this way all our streets would be safer and drivers happier.
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As a former bus driver on a campus with LOTS of bikes and pedestrians, I was (and still am – ahem!) hypervigilant about not hitting anyone. I am still shocked at how close people will come to me on my bike. Or when I am driving and I see people holding meetings on their cell phones while being 2 feet behind a biker and driving 40 mph.
What is wrong with these people? /rant
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My problem is that this can backfire. I’ve known people in the past who weigh every move as to what they gain on it and how it will profit them. So lunch, dinner, weekend plans, etc. are all balanced against where to go, who goes there or who will be there, is there a deal to be made or a favor to be earned, etc. It shortly becomes less about living and all about “not wasting time” with things they don’t feel directly profit them. So instead they waste real friendships, family connections, etc. in favor of better appearing opportunities.
Similarly, it also leads to pushing to make sure you get the “most” from everything, to the point that people forget to enjoy the journey. I’m reminded of a father shaking a piece of paper as evening neared in Disneyworld, yelling to motivate three tired looking little kids to “come on, hurry up, only two more rides and the park is closing soon.” I don’t know what the list was for, or how vested the kids were in the list at the beginning of the day, but I doubt that at that point they were really having any more fun and father appeared too vested in the list to recognize it. The kicker was that despite the kids perking up with interest at a street performance, the father hurried them past so they could get what was on the list done.
The problem is balance in these things and knowing when to adjust.
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I’m one of those sickos who actually likes my commute. I commute ~35 minutes each way, 4-5 days a week. The caveat here is that my commute is an early morning commute that is on mostly backroads with very little traffic. This gives me time to crank the radio, mentally prepare myself in the mornings, and wind down in the afternoons.
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Also love my commute! We live in a small town where I grew up and where my family still lives. It’s located next to a big city where both my husband and I work in the centre. On my bike it’s only 45 minutes and when it rains I can take a streetcar. My husband needs his car, but it takes him the same amount of time because of the traffic. Whenever possible (when it doesn’t rain) I go by bike and enjoy to see a big city wake up!
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I’m the same. Country backroads, about a 15 minute drive. Music up, windows open, singing along (terribly.) It’s my “Me” time, and I enjoy it…coming and going. I’m not sure I could deal with sitting in traffic, half hour or more each way though. My commute is only enjoyable because I’m pretty much the only person on the road.
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I’ve read a bunch of articles like this one, that use faked-up math to show how your time is more valuable. For one thing, if you’re going to take the $40K/year job, then your hourly rate has dropped from $25 to $20 per hour, so the time saved (in dollars) is $5,000.
Also, you’re not making money during the time you’re not commuting simply by cutting out the commute, so that money you’re “saving” by not earning it isn’t actually showing up in your bank account.
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Joel here
It’s not faked up – it’s real math.
Also, the overall point is bigger than the exact mathematics of the post. See this line:
“The comparison isn’t perfect, but it’s not supposed to be. It’s supposed to make you think. How do you spend a currency like time, one that isn’t measured in dollars and cents?”
The point being: we spend hours analyzing and overanalyzing how we spend out money but very little time analyzing how we spend our time. When, in reality, that’s a very odd situation. I can always make more money, but nobody, no matter how much money they have can make more time.
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Great post. Today I think of it more in terms of having X number of years on this planet and so a significant amount of time spent commuting alone in a car is mostly a lousy use of my most precious limited resource. Long ago I was able to make the best of a few long commutes though: listening to NPR, sharing a car with my husband and so catching up with him, or reading/studying/daydreaming on a mass transit commute.
The arrival of my son shifted things though and now a long commute, even used productively, is out of the question because it would take away time that I have with him. Our family is moving to a small town soon where we’ll all be within a 2 mile radius of each other during the day (it’s currently a 5 mile radius). I can’t imagine finding a job that would be worth giving that up and what this means in regards to our low stress mornings, more family time in the evenings, et cetera.
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I also saw this movie and enjoyed it for the most part.
I don’t look at it as I’m spending time, I look at is as I’m spending money to get more time-like when I pay the lady to clean the house. It’s 30 dollars, but then I have extra time to maintain my blog.
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I have an hour commute to work and while I would love a shorter drive, for me, it is a price I’m willing to pay to live out in the country. It takes me longer to get home, but once I’m home I’m exactly where I’ve always dreamed of living. I use the commute to catch up on news, listen to books or make plans for my small (very) business.
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What the above folks have been saying about opportunity costs. Though what matters most is the cost at the margin– how much would you get paid for an additional hour of work. For many people who are locked in at a standard full-time job, that marginal wage is going to be different than the full-time job wage.
Also: as hourly wage increases, both work and leisure become more attractive. If you have a target income, having a higher wage means you want to work less. However, the opportunity cost of your time has increased and a higher hourly wage can make you want to work more. These (substitution and income effects) work in opposite directions.
So sure, your current wage is a reasonably good value of your time when you’re trying to make decisions, but you can do a bit better by factoring in things like how much you hate to drive or how much you enjoy audio-books, what the next best use of your time is, how that additional 10K salary is going to boost your entire earnings stream when you next change jobs, and so on.
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YES to that last point about your future earnings stream. I think it pays to consider one’s career trajectory, not just individual opportunities.
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I love this article. I agree, too many people focus squarely on a salary when looking at jobs. There is so much more to think about.
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When you are older, you realize time is the only thing you have. When I was younger I was always in a hurry, nothing has changed. I want/need to fit in a lot in my life. It is a lot easier when you have accomplished a lot of what you set out to do. I focus on what is left and new goals!
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Hmmm, Marcin. I get what you mean about how much your free time is worth being measured in terms of how much you are making during that time, but I think that’s still a narrow view. If I use my free time to exercise or cook healthy meals or just to have downtime (as TB pointed out in comment #5, that’s important), isn’t that investment in my health “worth” something in terms of fewer doctor bills down the road or an extended lifespan?
These things are hard to calculate, though. If I got a job where my husband works, which is a 15-minute walk or 4-minute drive away from our home, I would almost certainly get paid more than at the nonprofit where I work, which is a 30-minute drive from home in “normal” traffic (lately, it’s been taking longer due to roadwork). However, I assume I would be expected to work at least 50 hours a week as opposed to the 40 I typically work where I am, and my current job is very flexible, allowing me to better juggle work and home demands. Is it worth spending more time in the car and more money on gas for less pay to have more flexibility and presumably fewer hours per week in the office? Hard to know. I’d have to have a clone of me who got hired at the other place and compare my life with Clone Me’s life to know if I’ve made the best choice.
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I agree with what the post is about. Getting most of your free time is very important. I just don’t agree with false math in the post.
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I love the conversation this has generated. I use the time vs. money analysis to determine with frugal ideas I want to practice and which ones do not give me enough payback.
In the case of the job vs. commute, there are also way too many intangibles that come in to play to make it straight forward math problem. You also need to take into consideration potential experience, opportunity, and networking value. You need to consider the situation of each individual household.
I worked from home for 19 years and last year I started commuting to different locations that were anywhere from 40-60 minutes away. Commuting is not my favorite thing but it not only helps me with multiple career opportunities, it has saved my husband from the 25 hours of work at his second job (that he was able to get rid of) but in the end, the resulting networking has brought me record profits and in exchange made the commute well worth it.
It’s just not a cut and dry equation.
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I pay a premium to live close to where I work and I will not live and work on seperate subway lines.
My colleagues cannot understand how I could pay so much for a small apartment, but I don’t understand how they accept a 3 hour commute everyday.
My location is worth every penny and when you factor in things like no need for a car and all the extras they have to pay for to have a house in the ‘burbs, I’m probably coming out ahead each month.
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Not a lot of jobs out here in the hills are offering six-figure salaries and tens of thousands of shares of pre-IPO tech stocks as compensation, so I’ll keep commuting over an hour into the Silicon Valley three days a week (I work from home Tuesday and Thursday). Sure, I could move closer to the office, but then my house would cost more and I wouldn’t live in the forest.
The scenario presented in the post is a sort of false dichotomy. Most people aren’t commuting into big cities because it pays 25% more, but because it pays 300% more, because that’s where all the high-paying, professional jobs are. Lawyers and bankers and engineers and doctors are commuting into the headquarters of big companies, or hospitals, or downtown practices where they can earn their big salaries. It’s not so much a case of the grocery store in the next town over pays $2/more an hour to their checkout people.
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Hey Tyler,
This is an actual example of a scenario I faced (not a made-up one). I would say that Silicon Valley is a little bit of an anomaly in the U.S. economy, but I would agree that there are more professional jobs within the city. That said, increased income /=/ increased quality of life. My main point is that most people make decisions based solely on salary requirements rather than considering everything that those decisions effect other than just money.
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I realized I was a bit wrong as I made the comment, but I still feel that a lot of these situations are probably more like “ALL the good jobs are in the city” or “ALL the jobs in my field are in the city” more than “the jobs in the city pay slightly better”, obviously there will be both of these sorts of situations, but the numbers would look different if you were comparing $40k/year close by and, say, $90k/year in the city.
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There are serious problems with “how much is my time worth” metric.
If someone’s free time is worth $30/hour to them, but their skill set is only worth $15/hour in the current economy, then theoretically they should only work the bare amount of hours necessary for survival (because all extra work is a “loss” under this metric). The reason this is a problem is that there is value to earning and saving extra. For another, there is also value in working hard to develop a skill set that is worth more in the future. As such, the opportunity costs are not clear.
On the other side of the coin, say your free time is worth only $25/hour, but you earn $40/hour at work. Does this mean you should work as much as possible?
I realize that “time is money,” but maybe a better way of looking at is from the time side. As in, compare the jobs as a 30-year career arc.
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This was a very timely piece for me. I got an opportunity tomorrow to be part of an audience for a game show that would pay me $56 dollars. At first it seemed really cool. Yay! I just have to cheer and look happy and get paid! But, when I thought it over I’m having a change of heart. One, we had to commit to being there for nine hours! We get a one hour lunch break but we have to buy our own lunch. And, it’s not exactly close to my house. Plus, I’ve done this kind of work before and it’s pretty boring. If I don’t do it, I can focus on more job searching, working out, relaxing, working on my business…etc. $56 is not going to make or break my budget, so it’s not worth it.
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I would say that the reason you follow GRS philosophies and make sound financial decisions is that you can then have a shorter commute and more free time. If you are up to your eyeballs in credit card debt, or have a excessively large mortgage payment, you might be forced to work at the longer commute job just to pay the bills.
However, if you making more than you spend at $40K, it becomes a choice to decide if $10K is worth an extra 40 minutes a day.
Taking control of your finances lets you take control of the rest of your life in this way.
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My husband commutes 30 miles each way to work at a major financial institution. When he first started at the company over a decade ago, the drive was only 15 minutes. But then they decided to build a huge complex in an outer suburb.
Since then he has carpooled, first with two guys who eventually became friends. Now only with one.
We’ve calculated, and it’s $10 each time he drives. I think the commute bothers me more than it does him. I hate the environmental impact, but at the same time, all our friends are in this part of town. We’ve both lived in this community for 15 years or more. Our lives would completely change if we moved out to this far-flung suburb. Frankly, I just don’t like this area. Why would I move there?
I guess he could look for a new job, but he just got a huge promotion this past year. And we are not in a booming metropolis. We actually are losing jobs here, so it would be very hard for him to find a comparable job that was closer.
We are just crossing our fingers that the VP in charge of his department will finally relent on the telecommute option. Of course that has its own problems, since the kids are around and hard to keep from their beloved daddy.
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I too like this article. It brought to mind an article I read years ago, written by a sociologist. His premise was that industrialized cultures considered time to be a commodity, whereas the third world thought of time as choice. Which was why the slower pace and “tomorrow” mentality seemed so infuriating to many industrialized countries, and why the 3rd world was so baffled by the frantic bustle to achieve things.
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Mr. Money Mustache had a good discussion (even if extremely biased against commuting) about the costs of commuting:
http://www.mrmoneymustache.com/2011/10/06/the-true-cost-of-commuting/
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I notice that article has a picture of the biggest traffic jam ever seen to illustrate what a “commute” looks like. Not all commutes are created equal, I guess. Here’s a a picture I took on my way home from work one day (I pulled over and got out of my car on the little back mountain road on “the back way” home from work). This isn’t to say that my commute is all mountaintop vistas of sunsets over the pacific, but just to illustrate that some driving is more pleasant than other driving.
One big failing in this analysis is that the value of time spent commuting is $0, and the value of time spent not commuting is 100% of your regular salaried time. This isn’t true. If you spend the time in the car listening to the news and so you don’t spend the time at home watching the news on TV, then maybe you got basically the same value out of both possible uses of your time.
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A different viewpoint on “opportunity cost.”
I am in a job that is sufficiently highly paid that to do better would require going to law school, graduate business school, or architecture school. I looked into each option after being in L.A. for a while.
Each option would require at least three more years of schooling, at least part of which I would not be able to work full-time.
During those years I would not be able to do *anything* else. No dancing, no travel, no fun. As someone who didn’t have a whole lot of fun early in life, giving it up in midlife was not attractive.
Each option was also a gamble. All three areas of interest are notoriously oversupplied with qualified candidates for any job that opens up. Pay ranges have been pushed down, and a move to accommodate a job would have been almost certainly required.
At my age, was it good strategy to invest 3+ years and a minimum of $60K (which would require loans) in order to move out of my relatively stable, physically easy, well-paid, and low-stress support position? Was it worth completely upending the comfortable life DH and I had, and putting at risk the practice he’s built?
My decision was “no.” The time I would have lost was too valuable to me, and the guarantee that I would actually end up earning more was just not there.
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Great article! Very thoughtful. I recently made a time vs. money chart when trying to sell some old clutter in my house, I figures that the amount of money I would receive would not merit the time I would need to spend. A very useful analysis!
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I saw that movie, and I’ll admit, I didn’t hate it! It’s cheesy, sure, but it really does tell you the value of time.
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As I’ve gotten older and have two young children, I have grown to absolutely value my time. I always have this quote in the back of my mind:
“The most important decision we make on a moment to moment basis is where we focus our time and attention. The sum of these decisions is our life.”
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Apart from time, what are other things worth? For example, recently I’ve had a spate of battery problems on my car. Apart from the time lost in getting it going again, how much was the stress worth, compared to the cost of a new battery?
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This seems similar to the way budgeting was laid out in Your Money or Your Life. Basically once you get past a certain financial threshold where your needs are met, everything comes back to time.
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Interesting. My husband and I just watched this movie a few weeks ago and it struck a nerve with me.
I’ve been a SAHM for almost a year, although I do some ghostwriting and freelance writing as well.
When I sit down to write uninterrupted, I can easily earn $30+ per hour. However, most of my time is spent on doing things that do not result in a monetary benefit. Nobody is going to pay me for changing my own child’s diapers, for wiping up messes in my own house, for doing my own laundry, for doing the family grocery shopping, appointment making, clothes mending, correspondence with extended family or anything else. And I don’t expect to. I knew that going into it!
There are certain paid activities that I do feel are not worth my time.
And as it turned out, having a paid job outside the home was one of them. After the cost of fulltime childcare for a newborn, toddler and before / after school care for a kindergartener plus a babysitter for school breaks, and then the cost of my transportation, I would have lost money by working. Even though, I have 8-10 years professional experience and a Masters degree in my field, which is highly specialized and growing.
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“The movie’s plot revolves around a world where everyone is genetically engineered to live until they’re 25. After that, they have exactly one year left before they die.” So, they are genetically programmed to live to be 26?
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I believe so: they don’t get the timepiece on their arm until their 25th birthday, then it clicks on with a year remaining. As they work, they get more time. As they consume, it gets taken away. If they did nothing, they would only live to age 26.
A fun sidenote is that they all *look* 25, so when a man introduces his wife, his mother, and I think even his grandmother, they all looked 25. Like vampires, only without the blood consumption, I guess.
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Valuing your driving time as equivalent in terms of salary to your desk time creates a false comparison. It’d be like saying that just because Mitt Romney earns more in investment interest in the ten seconds it would take him to stop and pick up $10 means that he sh
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I was at a conference in Chicago last week where a neurologist was pointing out the illogic aspects of our supposedly logical brain. Here was his example: If you were getting ready to buy a pen for $19 that you had your eye on, and your friend called you and said he found the exact same pen for $9 at a store 30-minutes across town, most people would drive across town to save the $10. However, if you were getting ready to purchase a suit for $550, most people wouldnt’t drive 30 minutes across town if they could get the same suit for $540. In both scenarios, it’s the same $10 and the same 30 minutes, but our minds work differently because of the incongruency of scale. Interesting stuff…
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I know the example and I do not doubt the idea it illustrates, but I also wonder if it had been ever really tested.
Personally, I’d ask HIM to buy it for me, as he is already there. If that’s not an option, I’d simply check if I’m planning to be near that place anytime soon and buy it then.
If it’s not there at all anymore, I can still console myself with the idea that I didn’t overpay.
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Sorry if the other comment got cut off.
Including your driving time at your salary rate is a false comparison. That’s like saying because Mitt Romney makes more in investment income in the ten seconds that it would take him to pick up a $10 bill means his opportunity costs outweigh the benefit of picking it up. That’s not true at all. He’ll earn his investment income in those 10 seconds whether or not he bends over to pick up the $10 bill.
Just the same way that until you prove you are going to monetize those extra minutes by earning money elsewhere, counting them as salaried time is a reflection of an monetary opportunity that isn’t there.
I’m not saying that time and convenience aren’t worthwhile- it’s just not easy to quantify like this.
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Now I really want to watch this movie. Thanks for the suggestion.
Definitely agree with you on this one. Why I live close by and ride the bus. The bus is discounted (thanks work!), doesn’t cause me to stress about other drivers, I don’t have to pay for parking and I hardly ever fill up my car’s gas tank.
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A lot of the comments here have to do with converting time into dollars. I did this very same comparison time and time again. One day I decided to think of time in terms of percentage of life instead of in dollars and it wowed me.
We can all discuss the value of time in dollars, the possible flaws in the math, the fact that you need an income so you have to spend some time working, etc. The overall point is that we all have a finite amount of time in life. We may be better served think of our lifetime as a pie chart and determining if engaging in a certain activity (money making or not) is worth taking a slice out of that pie.
I’ll save you the math but the short story is I’m 30 and thought about increasing my commute by 1 hour each day to buy a cheaper home. Over the remaining 35 years of my career this translates into a whole year of my remaining waking hours spent commuting. Based on that alone I decided it was not worth it.
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I haven’t watched the movie, so I can’t comment too much on it. It does, however, expose a very profound truth. Imagine if you knew exactly when you were going to die. How would you live your life differently then. You could write a whole book on such a topic. It would absolutely change everything about how you live you life. The better question would be: how wouldn’t your life change?
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Its funny, my dad made me sit down and do that math when I was considering leaving my first real job (after college) to a better paying job that had a 40 minute commute (when my current job had a 15 min. commute).
I don’t remember how the math worked out, but I do know I opted to take the new job with the longer commute.
While I think its a helpful exercise, its so hard to make those comparisons. Maybe the longer commute job has better opportunities or will open different doors, etc. which I see you mention. The longest commute I had was an hour when I was in grad school. I hated that commute, stuck on I-95 in So. Florida, it was horrible. But I used that time, I listened to review tapes to and from school every day, except for my Friday trip home. I am convinced that those two extra hours of studying was a big part of the reason that I graduated at the top of my class.
I’ve tried to use the time is money pitch on Mr. Sam in my efforts to hire a housekeeping service. If we both work long hours than isn’t it worth it to spend the money for someone else to clean the house b/c we could be utilizing our precious free time for something fun. And while I think that is a good argument, you could similarly argue that by foregoing the housecleaning service and saving that money we will have our mortgage paid of sooner thereby permitting us to retire sooner than we would have if we had opted to pay for more service providers.
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I think time is worth way more than dollars. But in many situations, if a change meant saving over $100 a month, I would do it, and when you apply a monetary value to this time, you’re making over $100 a month. But it really depends on the quality of the time. If you will be in bumper to bumper traffic every day, feeling guilty for burning fossil fuels and stressed about driving and traffic, this isn’t worth the $100 a month. However, if there is public transport or a carpool option, it may be a no-brainer to take the job if you can turn that 1 hour per day into quality time: reading, socializing, riding a bike and/or walking part of the distance.
I have a baby and a full time job. Reading books (usually science fiction, coincidentally) is something that many other mothers assured me I wouldn’t have time to do after the baby came. But I do have time for it, thanks to my commute on public transport!
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What’s with all the “everyone should telecomute and work from home” posts I’m seeing on financial blogs lately? I actually miss my commute now that I’m a stay at home mom. I enjoyed my job and didn’t mind the 20 minutes of quiet time in the car listening to entertaining morning shows. I also miss the interaction with my co-workers that you can’t put a price on either. Working at a traditional job (with traditional benefits) isn’t always evil.
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Technically, my job could easily be done from home. Probably 99% of it is conducted in the ether.
But I too would miss coming to an office – I am an introvert by nature and if I don’t interact with people regularly I morph into full-on Hermit – and I suspect I would be less productive in the home environment.
I like my current job, the commute is short and easy. I think the “telecommute and/or work for yourself from home!” battle cry, which has been trumpeted for over ten years now, is symptomatic of general *personal* dissatisfaction with the writer’s work and has little to do with overall lifetime benefits to workers *in general*.
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Excellent article. Impact on quality of life factors into every decision I make.
We’ve been considering a relocation to a warmer climate, and one of the factors in the decision making process has been how much commuting we will have to do for work, errands, recreation, etc. Right now, we live in an area where all these things are close at hand, but you can still live on a decent-sized, private piece of land if you want to. During a visit to one of the areas we were considering for relocation, the real estate agent showed us a home we loved on 5 beautiful acres at an awesome price, but the travel distance to most everything including a minimum 40 minute commute to work without traffic (which I’ve read is often horrible in that area at rush hour) was a deal breaker.
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I refuse to commute. I did it for awhile and learned that I have NO TOLERANCE for it. I live 3 miles from work for that very reason. This article is really interesting because it plays with the actual math, but there are also some things that make a person so miserable the money isn’t even a consideration any more.
Not to mention, the place we live close to work costs 2/3 of what the farther place did (though our current place is also a lot smaller).
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After a long debate with myself (since money are kind of tight), I decided to drive to work instead of take bus-subway-bus to get to work. It costs me much BUT it taked me almost an hour less to commute to and from work, I get up 20 minutes later in the morning, can go straight to the gym after work amd still be able to work on my Phd when I get home.
Yes, I have less spendable income that way but I get more things done each day.
If I could find a job equally mind provocative closer to my house I would probably take it even it paid less than my current one.
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