I've written about the time value of money before, and I think all people have an innate understanding that time is money. Employees sell fixed units of time to their employers in return for fixed sums of money. When the time unit is one hour, we call this a wage. When it's annual, we call it a salary. But what do we call spending (or losing) money in return for time? Unpaid vacation?

This blog isn't focused on the trivialities of terminology. Instead, I want to share my personal system on how I decide on which resource to expend (time or money) when confronting a problem. A colleague and I spoke about this just recently. His cutoff is $35 per hour. Using home improvement as a simple example, he will do the project himself if the total cost is more than $35 per hour, which includes materials. $35 or less, he pays someone to do it. He feels his discretionary time is worth $35 per hour and makes decisions based on it.

I love this system and have been using it for years. The only difference is that I add a gray area by using a range. My lower bound is $50, so anything less than this amount, I'll pay someone. The upper bound is $100, so anything more than this amount, I'll do it myself, assuming I have the know-how. These decisions are automatic and require little brain activity. What if the price falls somewhere in between? It depends, but the analysis is the fun part.

First and most obviously, $51 is a lot different than $99, so where the value falls in the range matters. Next, I look at my work forecast, both at my day job and my personal business. If I have many business commitments lined up and stand to make healthy gains, I'm more likely to outsource the plumbing job. If it's a slow season for business, it's more likely I'll dig out my pipe wrench. If all this seems salient to you, it should, because it's common sense.

The main point is that if you don't manage your time according to a set of governing principles, like societal laws, anarchy reigns. Guard your time unapologetically.

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