Determine Your “Life Wage” to Help Make Time-Saving Decisions

Posted May 31, 2010

When it comes to some tasks, we often struggle with whether we should just do it ourselves or hire someone else. Home improvement is a common example – Sure we can save cash if we do it ourselves, but those savings can quickly feel unimportant after spending a weekend on a frustrating project. With a simple thought exercise, we can put these decisions into more practical terms.

Consider the following: Imagine you’ve got a full day ahead of you of errands, work, cleaning chores, etc. This won’t sound like a very fun day to most of us, but imagine if you could somehow buy your way out of these tasks. If you could pay someone, somewhere, X dollars per hour to do the tasks so you could go and enjoy some free time, what would that dollar figure be?

I call this hourly rate your “Life Wage”, and it can help you to quantify time-saving decisions in a more concrete way. Your Life Wage can be variable — it may change from day to day or hour to hour, and you even may alter it depending on the task you’re considering doing. But once you start thinking in these terms, it becomes much easier to make time-saving decisions.

For instance, you’re considering whether you should just hire a contractor to do the grout in your bathroom rather than do it yourself. You’ve thought about your Life Wage, and you decided you’d pay $15 per hour to have a fun, relaxing afternoon, doing something you enjoy — rather than be stuck at home grouting a bathroom, in this example.

Assume the contractor would charge you $20/hour in labor (plus handle selecting and delivering all of the materials for you), and could likely do the job in half the time that you could. A job that would take you 6 hours would only take him 3.

Your labor costs paid to the contractor will be $60 (3 x $20). If you were to do-it-yourself, you’d be looking at 6 hours of work. Let’s divide the potential cost of the contractor by the hours it would take you to do the job instead. $60 / 6 hours = $10 / hour.

Cool! So our Life Wage is $15 / hour, and really the contractor only costs $10 / hour. It looks like the numbers are telling us that we should just hire the contractor and go out and enjoy our day (or do something else more pressing or interesting).

Depending on the task you’re considering, your Life Wage might be higher or lower. If it’s a task you particularly hate, you’d probably be willing to pay more to get out of doing it and enjoy some free time.

For me, yard work would be a very high Life Wage task. I’d be willing to pay $30+ to get out of the hour of lawn mowing and trimming. By our logic, if I could find a landscaper that charged less than $30 an hour to to mow my lawn, I should jump on it!

This type of thinking can really boost your efficiency, and help you to start valuing your time more than your money. There’s always another dollar to be made, but each hour we spend on this planet can never be earned back. By placing a value on doing things you enjoy rather than focusing on the costs of hiring tasks out, we can not only save time but get more out of what time we have.