OnPlane Financial Advisors
Do Well. Be Well. Financially.

Blog | Flat Fee Financial Advisor | Washington DC

I like to write about what happens in our lives and how it can relate to our financial lives. Not always but most of the time. So keep checking in. I'm glad to have you reading along.

Money Value of Time


Two words. Taxes & Time. 

Taxes: I've yet to meet a person who says, "Sure, I'd love to pay more in taxes! Where do I sign up?"

Time: Quite possibly the most precious resources available in our lives. Sadly, it's not something any of us have any control over. When it's our time to check out, we really don't have any say in it.

We live in what feels like an ever-increasing busy life that demands of our time. Yet, when it comes to our time, it can be one of the highest taxes we pay.

One of my core sayings is focus on [financial] factors we can control. And one of those factors is, ironically, our time.

Nope, not a typo.

The key differentiator here is how much time we have vs how we spend the time we have. While it's true we don't have any control over when our last day on this great earth will be, we do have plenty of control over how we spend that time.

My father-in-law has a saying:

"I never used to pay anyone to do something that I could do. Now that I'm retired, I never do anything I can pay someone to do."

This is a perfect example of valuing time vs valuing money

Money > Time

Based on his saying, it appears to me my father-in-law valued the money he saved by doing things and fixing things on his own when he was younger and working to save for retirement. And there's nothing wrong with that, btw.

Like most of us who're still working, I think it's interesting to note this was probably when his time was at a premium. Between work, family, and, well, life, he valued the money saved over the time spent. He saved money and spent time. The tax was on his time

Time > Money

Now that he's retired, what he values has changed: Time > Money. We could posit it was the tax on his time that helped create a comfortable retirement and put him in a position where Time > Money. Again, my words - not his. Now he saves time, but spends money. The tax now is on his money. Not a tax in the traditional sense but in a philosophical sense.

Look, this financial planning stuff can too often get us too focused on planning for tomorrow. Now, I'm not saying go full ostrich and live today like it's your last day - although in some instances that's not terrible advice. But what if tomorrow never comes? This is the balancing act.

Speaking of balancing act, to create the money we need to buy the time we want often requires one of two things:

  1. We spend more of our time earning that money (aka working) to create the money needed to buy time we want today. This might feel like a dog chasing its tail!

  2. We use money that could be saved/invested for a future lifestyle to create the time we want today. This is Time Value of Money.

The juggle is REAL.

Here are some basic examples of using money to buy time:

  • You pay a lawn care service because you a) hate cutting the grass and/or b) would rather spend that time with your spouse, kids, or pursuing a hobby you love

  • You pay a subscription fee for pick-up service at the grocery store which creates an hour or two of time each week

  • You hire a painting company to re-paint the bedrooms in your house saving you XX hours

These are all instances where we could complete the tasks ourselves and save some money. And the balancing act continues. Do we pay the “tax” on our money for the time today, or do we pay the “tax” on our time for the money tomorrow?

This perfectly captures what I mean when I talk about "where your money goes, and why?"

Here's where I think it’s important to do an audit on your Spending Plan. Run a Money Value of Time analysis. Are you doing enough of the things that bring joy/value to your life? If not, maybe you can outsource a few things in your life.

When it comes to your financial life remember it's your money. It's your life. It's your time, and that time is limited. It's okay to pay someone to create time. It's also okay not to pay someone to create time. Only you can decide whether to pay that tax on your time.

And this, my friends, is real financial planning.

Darren Straniero