Money is Life: The Trouble With Trading Time for Dollars
What do the things you own really cost?
Likely, much more than you realize.
Trading Time For Money
As an employee, you graciously (or reluctantly) offer your time and skills to your company in exchange for a paycheque.
So when you boil it down - The personal time you sacrifice turns into the money you earn.
Simple enough. Fair enough.
Said another way, the money you’ve earned represents the time you’ve sacrificed.
Hopefully, your earnings will eventually exceed your basic cost of living. At that point, any extra money you make can (and should!) be used to add convenience and comfort to your daily experience.
But, how much time is too much time spent earning money? In my opinion - you cross that line when your preoccupation with earning begins to erode the comfort and convenience that you set out to gain in the first place.
⚠️ Getting a raise or finding a higher paying job isn’t always a good idea!
If you leave your current role for a new, higher-paying gig you have to weigh your options carefully. Sometimes a bigger annual salary nets out to a comparable hourly wage. Here’s why…
Your Real Work Hours
Your job description says that you will be working 8:00 Am to 4:00 PM or 9:00 AM to 5:00 PM, but as anyone who’s ever had a job before knows, your total time commitment to earning is usually much more than 8 hours.
*Note: Many companies are embracing full or part-time remote work in some fashion, especially after being forced to oblige in light of the 2020 global pandemic. However, people who WFH (work from home) often find it hard to draw a line between the beginning and the end of a workday. In a lot of ways, bringing your work home can be just as problematic as commuting. I digress…
Losing Track of time
I once took a job downtown Toronto that was amazing in every way except one.
This job had ample opportunity for career development, the culture was progressive and energetic, and the people were first-class teammates, but the commute took a devastating toll on my personal life. After my first week, I realized that my weekly schedule had become a full-fledged whirlwind.
For context, here’s what a typical day would look like.
5:00 AM - Wake up, feed my 3-month old son, then put him back to bed.
5:30 AM - Pray, hit 50 push-ups, read for 20 minutes, then eat some breakfast.
6:00 AM - Grab a quick shower then decide how far I could push the boundaries of “business casual” today.
6:15 AM - Kiss my wife, dial-up one of my go-to podcasts, and back out of the driveway.
6:55 AM - Pray to God that I find a parking spot at the GO Station.
7:04 AM - Jump on the standing-room-only southbound train into the city.
8:06 AM - Saunter into a dimly lit office after a quick train change Downtown and a 12-minute hike.
8:10 AM - Coffee
8:15 AM to 4:30 PM - Work
7:00 PM - Arrive back at home.
7:15 PM - Put my son to bed.
7:30 PM - Dinner. Fam time.
10:30 PM - Lights out.
Now to you, this may sound like a walk in the park. Or, if you’re not the overly ambitious corporate ladder type, just the thought of living like this could send anxiety coursing through your body.
The point isn’t how you feel about this schedule. No offence, but I share this timeline only to illustrate one major point.
This was how I was spending my life. I was sacrificing all but 45 minutes per day with my son.
I hated it.
I get it, not everyone has a choice.
Some of us have to work crazy hours to keep the lights on, but that wasn’t the case for me. I was pushing myself to get ahead and ended up temporarily losing sight of what was most important to me.
By no means am I advocating for complacency or pressuring you to stop striving in your career. I’m as money motivated as the next guy! I just want you to stop and think about your relationship with money.
We are all guided by different values and driven by our own unique motivation, so this article is not a condemnation of workaholics. This is about me and my relationship with the daily grind. If you can relate, keep reading.
For all of the hustlers out there working to make a dollar, here are two pieces of advice to help you maintain a healthy relationship with your career.
Calculate The Value Of Your Time. Find out how much time you actually spend to make a dollar.
Get Clear On What’s Important To You. Write down a list of your core values and use it when you need to make tough decisions.
What Will This Cost Me In Minutes?
You go to work, get paid, now what?
If you have a hard time holding onto your discretionary dollars, think about your purchases in relation to the sacrifices you made to earn the money.
Let’s look at my sample day from earlier. Here’s an approximate break down;
390 minutes of sleep (6.5 hours)
270 minutes on the commute (4.5 Hours)
510 minutes at work (8.5 Hours)
180 minutes of family time (3 Hours)
45 minutes of personal time (.75 Hours)
45 minutes with my son (.75 Hours)
Even after living it, when I ran these numbers I was shocked. The disparity is staggering!
For someone who claims to be a family man, I sure wasn’t spending much time with my family. Combine my time at work with my daily commute and I was spending around 780 minutes per day outside of the house.
Yes, 13 hours every day!
That’s twice as long as I spent asleep, over four times what I dedicated to my wife, and a whopping 17.3x the time I spent with my son.
Take that in.
Each day - and in our lives, for that matter - we only get a limited amount of time. Once we spend our time it is gone forever.
Now, let’s talk about how much I was earning.
In an entry-level sales role at a technology company I was pulling about $60,000 annually, or $5k per month pre-tax.
If we assume that every month has 20 workdays, that $5k breaks down to $250 per day. Now, if you divide $250 into 13 hours (total time commitment to earning) you would get $19.23 per hour or $0.32 per minute - pre-tax.
Thirty-two cents per minute… minus federal tax, provincial tax, Canadian Pension Plan deductions and Employment Insurance deductions.
So… how much does that new iPhone cost again?
According to Apple’s website, in 2020 my 128 GB iPhone XR would cost $869+ tax ($981.97), or 3,068.66 minutes worth of work. (But really, the number is even higher because we didn’t account for taxes and payroll deductions).
That works out to just over 51 hours of my life in exchange for my iPhone.
I paid for my cell phone with two full days of my life.
Whether you realize it or not, time is the most precious resource you will ever have. You can’t save it in a bank account. You can’t find more of it in your couch. You can only make the most of it. So…
Before you drop your hard-earned money on that big-ticket purchase look back at your calendar and make sure that all the time you gave was worth it.
What Do You Value
It is important to know what holds the greatest value in your life. For me, dedicating time to my family and being an actively engaged father are of the utmost importance.
I love the feeling of providing for my family by earning a living, but when my career begins to compromise my relationships at home then it’s time for something to change.
Unfortunately, many people abandon their values when it is convenient.
Let me explain.
It might sound good to say that you “value time with your family”, but if you were to objectively measure the time and effort you dedicate to them would their priority be reflected in the data?
When your values are not also your priorities the enjoyment you get out of each day takes a hit.
If you do not feel fulfilled living the lifestyle that you’ve chosen, most likely it is because you are not spending your time doing activities that align with your values.
The Final Word
Your money is your life. It’s not the purpose of your life by any means, but it is a necessary tool for adding security, comfort, and convenience to your days.
So ask yourself - what do you want to spend your life on?
BOOK: One of the most paradigm shifting books commonly recommended in the Financial Independence community is Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence - by Vicki Robin. If you are serious about making a lifestyle change then pick this one up. I listen to the audio at least once every year.