Accounting for Time

The research is unambiguous: People who value time more than money are happier and more productive. But actually shifting to a time-first mindset is really hard. Partly, it’s because of how our brains are wired. Partly, it’s because we don’t know how to measure what time is worth. A $10,000 raise is easy to understand; calculating the value of an extra 30 minutes isn’t so simple. But it’s getting easier. Some of our research on time and happiness has been devoted to assigning tangible value to time and the happiness it produces. The hope is that when people are faced with a time-or-money decision, they’ll more easily see that giving up the money isn’t a loss. Our primary metric is the dollar equivalent of happiness. In other words, a positive use of time produces a happiness boost equivalent to what we would expect from a rise in annual household income. The process for assigning cash to time and happiness isn’t all that straightforward. First, you must round up a representative sample of working adults living in the U.S. and ask them questions about how much money they make, how happy they are, and how they spend their time. (Note: Working adults hate answering survey questions.) Then you must take their answers and run statistical analyses to compare how income affects their happiness and how their time-use decisions do. The process isn’t exact, either. Our data is accurate, but it’s not needlessly precise. Saying some activity is worth $1,139, for example, is a little too specific, so we’ve rounded numbers. We’ve also focused on averages, so these numbers won’t apply to all people in all circumstances. Finally, the happiness boost will vary based on income. Surprisingly, buying time is most effective when you have less money. For a person who makes up to $50,000 per year, the value of buying time can reach the equivalent of $40,000 in additional annual income. For someone who makes more than $125,000, it’s $16,000 — still substantial. The lesson is that everyone who wants a big gain in happiness should spend money to buy back time. Here are some early examples of time-value calculations we’ve made. Shifting your mindset to value time over money brings a happiness boost equivalent to gaining $2,200 of annual income. It’s important to point out that this boost is from simply changing how you think, even if you do nothing else differently. The effect is likely due to the reduced stress that comes from not obsessing so much over money or worrying about how to get more of it. Savoring meals is a happiness-inducing activity. Americans spend much more time choosing what to eat than other cultures, and they don’t enjoy mealtime as much or spend as long eating. This is in stark contrast to the French, who savor meals every day and are happier for it. Decreasing the time spent on decisions around meals — what to eat, where to eat, with whom to eat — and spending more time enjoying a meal with others will gain you the happiness equivalent of a $3,600 bump. Spending time together in relationships helps in ways material items can’t. Couples tend to give each other stuff to express their devotion. They’d be better off giving the gift of time by spending money on time-saving things like a housecleaning service, or a driving service so that they can do something else during their commutes. (Maybe even work, which in turn might shorten their workdays.) Those kinds of gifts will create far bigger happiness bumps than material items; our calculation puts the happiness increase at $4,000. Outsourcing disliked chores seems like an expensive extravagance, but in fact the investment can be worth it. In terms of happiness, the decision is worth an annual income boost of about $18,000. Let’s play this out. Say you make $48,000 per year and could hire someone to buy and put away your groceries — something you hate doing — for $100 per week. That’s $5,200 per year, 11% of your salary. It seems unreasonable at first, but once you know the life-satisfaction boost, it suddenly seems very reasonable. Annual salary: $48,000 Grocery service: – $5,200 $42,800 Life satisfaction bump: + $18,000 Salary + happiness equivalent: $60,800 Annual salary: $48,000 Grocery service: – $5,200 $42,800 Life satisfaction bump: + $18,000 Salary + happiness equivalent: $60,800 And remember, if grocery shopping takes two hours a week, over the course of a year you’ll gain 104 hours — more than four full days — to fill with other activities. Before investing in outsourcing chores, it’s important to identify the specific ones you dislike. Some people may enjoy cooking but hate the prep work. In that case, a meal kit service is a good investment. Others enjoy the feeling they get from cleaning the house, so outsourcing that task wouldn’t make sense. A Roomba is not the path to happiness for everyone. Chasing deals usually isn’t worth the time it takes. Think of driving out of your way to save a few pennies per gallon on gas, or comparison shopping between stores for an item you may save only a few dollars on. Or consider this scenario: You want to work from a coffee shop a few days a week, and there are two equally close to your house. At one, you will be left alone, and you’ll spend $20 per week on coffee and pastries. At the other, you’ll know the staff and chat with friends, but you’ll spend $60 per week. Which do you choose? On the face of it, the first one seems like the better option, because you’ll get more done and spend far less money. But being more productive doesn’t mean you’ll be happier. You may get less done at the second shop, but the happiness increase is worth about $5,800! Quiet coffee shop: – $1,040/year + 0 happiness bump – $1,040 in happiness Friendly coffee shop: – $3,120/year + $5,800 happiness bump + $2,680 in happiness Quiet coffee shop: – $1,040/year + 0 happiness bump – $1,040 in happiness Friendly coffee shop: – $3,120/year + $5,800 happiness bump + $2,680 in happiness Even if you accomplish only half as much work at the friendly coffee shop, you will be much happier, which in the long run will make you more productive anyway. Vacation is the most egregious misuse of time. In our survey of working adults in the U.S., we found that 75% of employees who got eight vacation days a year did not take them all, 40% used fewer than eight days, and 31% took fewer than four days. If someone put stacks of money on a table and said we could take it, we would not walk away. By not using our vacation time, that’s effectively what we’re doing. We have been gifted time, and we know time is what will make us happy, and yet we do not use it. In our sample, the mean number of vacation days used was nine. According to our analysis, taking eight more days a year is equivalent to a $4,400 increase in annual income. For many people, these days are available! All they have to do is use them — the happiness bump is significant even for someone who makes $100,000 a year. Family and friends are worth a lot in terms of happiness. In an extreme case, shifting from working all the time and never seeing friends and family to spending time daily with them would be worth a $108,000 boost in annual household income. This example is a theoretical exercise; most of us spend some time with friends and family, and few of us spend all of our hours working. But the calculation should give you an idea of just how much value your time can have. If you spend most of your time working in the hopes of getting a $20,000 raise, you may well get the raise. But your happiness increase won’t be nearly what it would have been by spending that time with friends and family. And there’s no substitute; people don’t become happier from spending time with colleagues and clients — they even report enjoying that time less. There are other happiness bumps we’ve calculated. Having more leisure time is worth about $1,000 if it’s passive (watching TV) and $1,800 if it’s active (exercise). Being married and living with one’s spouse is worth a $20,700 increase in happiness. But some activities feel like pay cuts because they reduce our happiness. Shopping, for example, is worth −$1,100 in happiness, as is education (though it has longer-term benefits). And some work activities — even if they’re things you do in your spare time, rather than part of the workday — equal about −$2,900 in happiness. It can be hard to get your mind around this concept, because we’re not used to thinking about time in these terms. But budgeting time carefully — as carefully as you would money — could pay off big for your, and your loved ones’, happiness. The Big Idea

Accounting for Time

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