At one point in my life, I bought into the saying that “time is money.” Never was I more aware of the link between time and money than when I was a CPA stressing over tracking every minute I spent at work and allocating my time among clients and other work-related tasks. I would even be a little stressed if a partner called me into his office and talked for too long. I would start thinking, “this is going to look bad that I have an hour of unbilled time” and “now I’m going to have to work more hours to make up for all this unbilled time!”.
Not only was the time I spent on the client billed to them at my hourly rate, but also my time was turned into ratios that showed my job performance, my efficiency, the amount of time that I spent on client work but that couldn’t be billed, and more. Despite my excellent employee reviews, I would consistently have to worry about having enough billable hours. I loved my job and the challenging work I had in personal, small business and corporate tax.
However, I did not love the time billing aspect, which itself took up at least 15 minutes of each day and over an hour each week. In many industries other than just public accounting, time directly converts to billing clients and customers, which directly converts to cash. It’s a very direct link with time and money and one that is essential for these businesses to thrive.
…BUT TIME REALLY IS NOT MONEY
However, there’s a huge difference between time BEING money and time being WORTH money. When you have the mindset that time is money, you:
- Feel rushed constantly
- Feel that you need to work more hours to get more and more money
- Put money and things above people and relationships
- Don’t enjoy relaxing or down time
- Have a sense of never having enough (time and money both)
When you instead have the knowledge that time is simply worth money, you realize that:
- You are choosing whether to spend your time making money or to use your time for something that is even more valuable such as taking care of your health and relationships
- If you aren’t so dependent on money, you can do even more valuable things with your time
- You’ll never get your time back, but money comes and goes
LEARN IT NOW OR LEARN IT TOO LATE
It often takes a wake-up call such as a life-threatening illness or sudden accident to make us realize that our time is more valuable than we ever realized, but it doesn’t have to be that way. Just as I always promote using your money to provide value in your life (hence the name “Making Your Money Matter”, you should make sure that you’re using your time to provide value in your life. You can do this by:
- Prioritizing your time to make sure that the things that are important to you are put first.
- Spending your most valuable time where you are the most productive on the most important tasks.
- Putting relationships ahead of work and money-making ventures. Jobs and business opportunities can vanish instantly, but your family and friends can always be there for you. Your health is also more important than any job opportunity.
A recent UCLA study showed that people who place a higher value on their time than they do on money are happier, despite the fact that over half (64% of those surveyed) chose money over time when given the choice.
FINDING BALANCE BETWEEN TIME AND MONEY
Realistically speaking, many of those that are the most successful in building wealth have a good balance of not just working nonstop to bring in money but in building relationships and using their time for more than just their own personal gain. They are also doing something that they are passionate about, which brings joy into their life through the time spent on it.
A great resource if you’re intrigued by the link between money and time is the book “Your Money or Your Life” by Vicki Robin. If you feel caught up in the rate race of America—going to work long hours to make money, spending all the money, needing to work more to make more money and buy more and more things—you need the perspective that this book brings. The book walks you through a calculation of your real hourly wage factoring in the costs that directly relate to your job (clothing, commuting costs, etc.) and the true number of hours that your job costs you (commuting time, decompression time, etc.) and refers to them as hours of “life energy”. The overall theme is this: TIME IS LIFE.
The biggest difference between time and money is that time is a finite resource, where there will always be more money out there for us to earn. None of us are going to reach a maximum amount of money that we are going to earn-there’s plenty of that resource in the world (although unfortunately most people worldwide don’t have the ability or opportunity given to them to obtain it). If you are willing to work more hours, you can undoubtedly find another part-time job somewhere. But where is the quality of life in always needing more money in order to be happy? In the end, I think we’ll all agree that what we really want is more time.
Spend your money wisely, but spend your time even more wisely. Time’s not money, it’s life!