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Time vs. Money Dilemma

At a basic intuitive level, we all know or have a rough idea of what our time is worth and can quickly make a decision about it depending on what the task or situation is. For example, the average person would accept N50,000 to take pictures of nature under the scorching sun for 10mins, however, it would most likely be rejected if just N100 was offered.

On one extreme (N50,000) end of the spectrum, it is easy to know if a task is worth it or not and on the other end (N100) it is easy to also deduce, however, what becomes confusing is when you begin to have cases that move toward the middle of the time value of money spectrum. This is where most of life’s decisions lie.

Financial skills everyone should master (1)


  • Should you pay N30,000 for a 1hr:30mins flight from Lagos to Abuja or spend N10,000 going by road and arrive in 6hours?
  • Should you go to the market and spend 5hours cooking and cleaning up or pay a caterer to sort it all out?
  • Should you do your laundry or handover to a dry-cleaner?
  • Should you pay for someone to clean your house or you resolve to do it yourself?
  • Should you spend the weekends working on a side hustle that would earn you N100,000 straight away or work on your long term business idea that may generate millions in the next few years?

We are faced with a myriad of choices like the ones stated above, but the problem is that most people base their decisions on gut feeling or instinct and have not bothered to sit down to calculate what their time is actually worth. 

How to calculate the value of your time

This article would focus on the ‘Realized Income Method’ which is based on the income you have already received or earned. To use this method you will need two numbers;

  • The amount of time you spend to earn money.
  • The amount of money you earn during that time.

[READ MORE: Money mindsets that rich kids learn from their parents)

Step 1: How to Track Your Time

This requires you to measure the total amount of time you invest to earn money, not just the hours you spend at work.

For example, if you live in Lagos and work at an 8-5 job but spend 2hrs daily commuting to work; it will cost you a total of 13 hours to earn money daily. In addition, you should also add any time you spent working on a side gig.

If you find it difficult to place a finger on the number of hours you work, you can use an estimate of 2,400 hours.


If you work 8-5 (9hrs) and spend 1hr commuting to work – that’s a total of 10hrs a day.

If you work for 48 weeks in a year (52 weeks – 4 weeks for leave days/vacation) that gives you a total of 2,400 hours (50hrs X 48 weeks).

You can make adjustments based on your realities, but the above example gives you a rough idea of the amount of time you burn to earn money. If you want to go more detailed into the exact number of hours, there are apps that can be helpful in helping you track specifics like the amount of time you spend on a particular task or time spent surfing the web and browsing your phone.

Step 2: How to calculate how much you make

This is fairly simple if you are a salary earner as all you have to do is take a look at your monthly pay (net of taxes) and multiply by 12.

It is also important to include the money earned from your side hustles and freelance activities.


Step 3: Calculate your time worth

To do this, you will divide the total money you earned by the amount of time you spent working.

Time worth = Amount Earned/No of hrs spent working

What do I do with these numbers?

Now that you have an estimate of what your time is worth per hour, you can use this information to create a framework for making better decisions on a daily basis.

For example, if you know your time is worth N20,000 per hour, paying a caterer N10,000 to cook for you will make more sense than going to the market yourself and doing the dishes and spending 3-5 hours.

If you know your time is worth N10,000 per hour, then you can afford to pay a drycleaner N5,000 to do your laundry instead of spending hours doing it yourself (except you really enjoy doing it).


[READ ALSO: If you experience these signs then know your salary is not enough)

Is it better for you to shop online and pay for a watch with extra shipping charges or spend an hour to commute to the store physically and save money?

I’ll leave you with quotes by Naval on the “How to Get Rich Podcast”.

  • Nobody is going to value you more than you value yourself.
  • You have to set a very high personal hourly rate and you have to stick to it. It should even seem absurd to you.
  • Always factor your time into every decision
  • If you can outsource things for less than your hourly rate then outsource it.

This article was inspired by James Clear on his article on “The Value of Time: How Much is Your Time Really Worth?


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