Time is Money
The way we view work and life balance continues to evolve in the modern world. As savvy tech companies with rock climbing walls in office buildings and jungle conservatories on company properties arise, more and more people are questioning what a truly healthy lifestyle should look like. Home much is your time worth, and what should you be spending it on to balance work with your personal life?
While there’s no one answer to the question, it’s still safe to say that you can get more out of your time by spending your money in ways that will ultimately help make you happy.
Spending Money to Save Time Can Boost Your “Happiness Returns”
The more money you make, the more valuable you perceive your time to be — and the more time-strapped you may feel, according to University of British Columbia psychology professor Elizabeth Dunn.
So wouldn't it stand to reason that if you use some of your hard-earned money to buy yourself more time — for example, by paying someone to clean your house or mow your lawn — you might feel happier?
Indeed, that was the primary finding in a series of studies by Professor Dunn and other researchers published in the Proceedings of the National Academy of Sciences (PNAS).
The study's authors surveyed 6,000 individuals at diverse income levels in multiple countries, including the United States, Canada, the Netherlands, and Denmark. The survey asked participants about whether they spent money monthly to hire others to take care of unpleasant or time-consuming daily tasks or chores — such as cleaning, yard work, cooking, and errand-running — and if so, how much they spent. Respondents were also asked to rate their "satisfaction with life" and report demographic information, such as their income level and whether they were married and had children.
Across all studies, those who spent money to outsource disliked tasks and/or save time had a stronger life satisfaction rating. Findings were consistent across income spectrums.
Of course, correlation does not necessarily indicate causation, so the researchers designed a follow-up experiment to further test their hypothesis.
THE FOLLOW-UP EXPERIMENT
In this experiment, researchers gave a group of 40 adults $80 each to spend over the course of two weekends. During the first weekend, they were to spend $40 on something that would save them time, such as ordering groceries online and having them delivered. On the second weekend, they were directed to spend $40 on a nice material purchase, such as clothes, board games, or a bottle of wine. On average, those who spent money to save time reported better moods at the end of the day than those who purchased material goods.
"If you have a lot of money and a lot of nice stuff, but you're spending your time doing things that you dislike, then your minute-to-minute happiness and overall happiness is likely to be pretty low," said Dunn in an interview about the research.
The bottom line? If you can afford it, don't shy away from spending money to save time. Doing so may be one of the only ways money can truly help buy happiness.
WHAT YOU CAN DO NEXT
At the end of the day, getting the most out of your time is what’s important. Managing your wealth effectively, especially through retirement investment, can help you use that time to its maximum potential.
We can help you plan out your retirement switch from accumulating years to distribution years so you can manage common retirement portfolio risks, increase the longevity of your savings and plan for spending money in ways that will give you the most happiness.
Talk to an Advisor today about implementing some “time-buying” strategies in your Wealth Plan:
"What Is Your Time Really Worth?" Elizabeth Dunn, TEDx Colorado Springs, December 1, 2014
"Buying Time Promotes Happiness," PNAS, July 24, 2017
"A Psychology Expert Says Spending Your Money on This Can Boost Your Happiness," CNBC, November 10, 2017
| Steve Hengehold CFP® RICP®
Steve has been with HCM since 2014. He is dedicated to helping people understand their necessary commitments and moving them towards their goals. He loves helping clients to focus on their passions. When not at work, Steve enjoys playing guitar, reading, deferring taxes, compounding investment returns, fishing and SCUBA diving.