Recently I mentioned that life is short and we only live once. In my line of thinking, this means that the time that I have remaining on this earth is valuable and I think everyone on the path of financial independence values their time highly. Even those who aren’t working towards financial independence value their time highly by seeking out the highest paid job available. But did you know that a single person, whether knowingly or not, values their own time multiple ways? I believe there are four main ways that we each spend are own time.
1.) Time you spend on the necessities
In this category I would consider time sleeping, eating, working out, and the general care of our body. We all must do these activities to survive or live a longer healthier life. Just these basic activities easily consume a third of the entire day. That means if you work for 8 hours (or longer once you consider the lunch break and commute) you have already consumed over two-thirds of your day. This does not leave much time to do the things that bring you fulfillment or happiness. Which is why I seek financial independence.
2.) Time you spend for money
This one is the most basic concepts that the majority of us adults do. We go to work just for a paycheck. But if we are giving up 40 hours plus a week then we better get some good money for it! But for many people this may not be a time of their day that brings out enjoyment. In fact, about 87% of workers are disengaged or actively disengaged in the workplace. You may not hate your job, but you may just be there going through the motions and collecting that paycheck. Hopefully you put that paycheck to good use and boost your savings rate, because your savings rate is key to when you can retire.
Even if you love your job, would you put in the hours that you do if you were financially independent? I may decide that I want to continue to work until kids (when we have them) graduate from high school. But that doesn’t mean I would want to work 40 hours every week if I don’t have to. I would rather work a more relaxed schedule if I continue to work past financial independence.
The more you spend the longer you must be trading your time for your money. I would just like to have the option to stop trading my time for money.
3.) Time you spend saving money or earning side income
Some side incomes can actually do very well, in fact J Money has an entire post regarding ways people have earned side income. But we also spend time trying to reduce our expenses and find more frugal ways to do things.
Working out at home, cooking our own meals, buying in large quantities, and doing your own repairs are just some of the ways that we can enhance our frugality.
But shouldn’t we value this this against what we can earn on a side income? If I am spending two hours a day trying money saving activities and I manage to save $5 a day, is it more effective to work part time or try to earn extra side income? This is an area in which you must question whether or not that money saving activity is worthwhile because if you don’t really enjoy it maybe there is a better opportunity for you to earn money instead.
4.) Time you spend doing things you enjoy
These are things that you are willing to do for a small amount of money, for free, or even pay to participate in. I enjoy personal finance so I am paying to host this blog. You may enjoy movies and you are willing to rent, buy, or go to the theaters to watch them. Or perhaps you really enjoy running or biking. This category is limitless to what you enjoy. If you love your work it could even fall into this category, maybe you love writing and moved to blogging full time such as Dividend Mantra recently has. The trick here is that you can easily fill this time with activities that are free such as books from the library, biking, hiking, walking, etc, that you can do few things that you pay to do. In fact, if you work full time, I would almost argue that you probably should do minimal activities that you pay to partake in as you are more than likely not financially free and why spend your limited time running from activity to activity?
The Secret to Success
I believe that the secret to success is found when combining activities in various categories, but the one that matters the cost to combine with is the 4th category (something you enjoy). Sure I may save less money if I planted a garden than if I would spend that extra time working part time. But if you enjoy gardening then you are doing an activity that you love AND saving money. Or you could take a part time job that is a bit physically challenging, but you get paid and you get your exercise. In fact if you LOVE this part time job, you have now combined three categories into one activity! The more I think about frugality the more I realize that it is more about optimizing your life experiences to get the most out of every minute. So money isn’t the answer to everything, but if you are able to achieve happiness in every waking moment, then you have a fulfilling life. And this is my desire for the future, to trade my full-time work to possibly do numerous part-time gigs that all bring me enjoyment, but may also enhance my life in several ways. Be it monetarily, physically, or happiness.
What about you, are you trying to maximize your time to its greatest potential?
Photo Credit: renjith krishnan / freedigitalphotos.net
Love this, Kipp! The older we get, the more time flies, and the more important it becomes to value our time and do the things we love. “Stuff” is no longer a magnet for us, freedom to spend our time the way we enjoy is.
Thank you Laurie! I agree that we should allocate our time towards what we enjoy, but for some for someone like myself I have to put in the work doing something I don’t necessarily hate, but work nonetheless. I need to build my financial freedom one brick at a time.
I am definitely trying to maximize my time right now, but it is extremely hard. My oldest started school and putting her on and off the bus has cut my workday down by about an hour. I am really struggling with that so far.
That sounds like a difficult transition. Are you finding it takes more time to prep for school or daycare or just that you need to relearn the efficient way for the process?
No, she just gets on the bus later and gets home a little earlier. I can still work while she’s here but it is more of a challenge.
That does sound like a problem… I am sure it sucks to make up that hour later or earlier when everyone is home (or in bed).
Thanks for the S/O, Kipp!
Oh, a part-time job where you get paid to workout is perfect! Another reason I love working on our family farm. “No, let me lift that.” Talk about a excellent use of time!
Nice post.
Hey Will,
That is a good example where you can be happy, get exercise, and get paid! That is basically the perfect combo there!
I am glad you enjoyed the post.
Kipp,
Great post. And thanks for including me!
I agree that it’s all about optimizing. Loving what you do allows you to make money while enjoying how you spend your time, but it’s because I’ve never found a conventional job I love in that way I’ve chosen to pursue freedom to do whatever I want, whenever I want. Furthermore, even if I loved my job I’d want to do it on my schedule.
Financial independence means you are getting paid to do what you love. However, it’s important in the meanwhile to enjoy the journey. I’m lucky in that I found a passion in writing, but I suspect most people could find a way to make money doing what they love, even if that means FI takes a bit longer.
Best wishes.
Hi Jason,
Yea, I agree having an open schedule to do what you want when you want is the best way to go! I think that there are degrees of independence, and getting rid of debt and building even a small dividend / passive income portfolio will do wonders in itself, such as you are now able to write full time for a living (and others have achieved this as well). But enjoyment is key, I do not hate my job, but I wouldn’t want to work full time if I was FI. Maybe if I could do something part time I continue working, but doing payroll is an issue for traveling… every 2 weeks people want to get paid! Not sure I would want to be that restricted or not depending on where I am financially.
This is exactly why we’re working so aggressively towards FI–we want to have more control over our time. Mr. FW and I are both tired of how we’re forced to allocate our time with our 9-5 jobs. We’re trading time for money, and we need the money in order to reach FI, but we have so little time leftover to pursue our passions. All that to say, I completely agree with you on maximizing time!
Thanks Mrs Frugalwoods. I think for me I need to focus on doing things that will save money (or make money) that I will enjoy, but also do things that will save money even if I don’t enjoy it if the savings are high enough. The best way for me to compare money saving activities is to compare savings by the hour. So really my grocery shopping experiment I am working on is basically HORRID returns… like so far my savings shopping other places are very little without considering the time traveling (but considering the travel costs). Shopping at Aldi (which I like them, wasn’t there before, seems to go pretty good, but I don’t need to buy much on a weekly basis) saved me less than $1.00 after driving costs, but at least 30 min more in time spent traveling… so yea… This experiment will be marked as a failure, but on the plus side my other experiment making laundry soap was a great success! I just need more time to get the posts on these together (future posts failed spoiler alert!)
Win some and lose some…
You raise some good points, Kipp, and I’ve even wondered if I should take a part time job for side income instead of pursuing a blogging / freelancing route. I’ve decided, for now, to pursue the latter because I’m thinking it will be good for me as a retirement thing. Another consideration is, so what if I have to work 6 months longer than I would like, if my quality of life for the next four years is better too? All food for thought, but what’s most important is the big steps are being taken to become FI, better late than never.
Hey Deb,
Happiness throughout the journey is the most important part… but I did also consider maybe working part time at like Fedex or UPS to get exercise while making money. Although that would be difficult to do when kids come around whereas blogging I enjoy, but it doesn’t really create any revenue in the short term. Who knows if it will in the future, but if it helps me be more responsible financially then perhaps it is already earning me a return on my money?
Time is very valuable, you only have so much. As I prepare for early retirement, it’s even more apparent.
When you have the opportunity to swap time for money, you have to ask yourself if you want to work now, or later. Working now for one hour might give you two or more hours of leisure later on.
Hi No Nonsense Landlord,
That is a very good point because compounding will do the heavy lifting later. You just need to get the ball rolling somehow, and it looks like your method is paying off your rentals! I still have alot of other debt to deleverage as well as investing to be made. Rentals sound interesting, but I think I may go the REIT route at some point unless if my maintenance skills get drastically better in the next decade.
Great post! I’ve been pondering about the balance between making memories or money now. Life is meant to be enjoyed. But then again, life involves responsibility too, both personally and financially. It’s something I’m pondering about lately.
Cheers.
Thank you Henry. Once you look at income or money saving activities through a dollar per hour basis, I think you can make the best decisions on what to do with your time. You still have to do the activities to see how much they may or may not save you, but then you can decide which ones are worth the time and which are not. I am finding that traveling other places for groceries is probably not worth my time, but making laundry soap paid be a better rate than my regular job. The thing about money saving activities is you can fit them around your schedule whereas a second income may not be as flexible.
So I say experiment away which side income and money saving activities and see which ones are worth continuing.
wow this a great post! I am learning to say no to jobs proposals more often now days even if it means to earn less for now. My oldest child is going to college next year and I still can’t believe that time passed by so quickly! With every day passing by I just want to stop in each and every moment and enjoy it.
Thanks HHWG,
I’m glad to hear that you are finding life balance! From the sounds of it kids grow up very fast, I probably won’t be financially independent myself until they are about to head off to college, but I hope at some point I will be free enough to reduce my schedule at the very least. Right now not too much of an option, too much debt and not enough savings. However, time is on my side (at least I hope it is!).
I think you should rename #2 “Time for necessary evils” I mean, that’s kind of how I would chalk up the time at my day job
Hmm, maybe “Time for Temporarily Necessary Evils”? At some point we should be able to quit our day job I would hope!