What’s the correlation between time and money?
Our society is very much focused on earning money. You spend your entire life trying to make yourself capable of earning money. You go to school and later college, spending a fortune to get an education. All this preparation is geared towards your future career. After graduating, you enter the job market or start your own business. In a way, you’ve spent a lot of money to earn money.
You’ve invested a lot of time too. And you’re going to spend a lot of time earning a living as well. There is one thing that rarely occurs to us; money can be earned and your bank accounts can be replenished. There is no way to earn back time. The time you have spent can’t be retrieved and considering that you only have a limited quota of that, it is time to consider using it more wisely.
How much money is your time worth?
Someone brilliant came up with a formula that allows you to know how much money your time is worth. Essentially, you divide your income from all resources and divide it by the number of hours an average person works in a year. That is about 2000 hours and an equivalent of a 40-hour week. So, if your annual income was about $100,000, an hour in your life is worth about $50. Now, this isn’t an exact science but it does bring things into stark perspective; $100,000 is a little more than the average income that Australians earn.
So, during your work day, if you spend about an hour of your life distracted and unproductive, that’s fifty dollars from your pocket. This especially relevant in the case of a small business owner, who really needs to make the most out of their time. So, you must ask yourself, is an hour spent on being unproductive really worth that $50?
A lesson for delegation
Small business owners are very reluctant to delegate tasks, mostly because they are assuming the risk and if an employee makes mistakes, they’ll be the ones to pay the price. However, if you use the above formula, you might realize that you’re actually saving some money and time when you delegate.
For example, if you take two hours to finish something that someone else in your company or outside could do in an hour, you’re already saving time. Moreover, you’re also saving money, especially, if they charge you less than what you could potentially earn in that hour. So, set up your time to work in way that no money is wasted and no time is wasted as well.