Money is like the tide. It’s either flowing in or it’s flowing out. It’s either buoying your ships or leaving them grounded in the shallows. It’s never still.
That creates an interesting philosophical question: are you losing money every moment you’re not earning it?
You might be inclined to think, simply sitting there, wherever you are, reading this article, that as long as you aren’t spending it, your money is stationary. But you’re constantly incurring costs. The bills are running up, whether you’re doing anything or not. So there’s at least a partial truth to the idea that money’s either coming in or it’s going out.
Your hourly rate
It’s an interesting idea, because it helps put certain elements of saving and spending into perspective. Because time equals money, but money also equals time, so everything is (essentially) relative.
Here are two different ways to think about that:
- You’re paid $20 an hour at work. That’s what your time is capable of earning you. (It says nothing about your personal value, by the way. We’re just thinking in terms of current earning power.) When you spend $5 on a large iced coffee, that coffee represents 15 minutes of your creativity, labor, effort, and sweat – however you view your work. Does that feel like a good trade to you?
- You’re still paid $20 an hour. You spend 13 straight hours binge watching Orange is the New Black. That’s $260 worth of your time. Is that experience worth $260 to you?
The point isn’t to feel bad about the things you do or the way you spend your money. The idea is simply to place the proper value on your time and your money. Are your purchases worth the time they cost? Are you using your time in a way that feels worthwhile (considering the cost)?
You’re never doing nothing
If you think of every moment as having a monetary value, it can have a dramatic effect on how you approach your leisure time. Which isn’t to say that there’s a wrong way to spend your free time, but if you had to buy your days off would sitting around feeling bored be an acceptable way to use that time? If your weekends cost you hundreds of dollars, wouldn’t you feel slightly more inclined to go out and do something actively fun?
Ultimately, the biggest takeaway should be to just think about how you value your time and your money. Chances are good you haven’t been valuing yourself highly enough. So set your hourly rate, and make sure you’re getting fair value for your time and your money.