Money Is Time

“Time is money” is a saying that I heard a lot when I was young. The implication being that your time has a value that can be measured in financial terms.

But money can also buy time, in the sense that it enables you to delegate or outsource those tasks which you don’t enjoy or are not good at doing, thereby freeing you up to do those things that you are good at and enjoy.

But there is another way of thinking about money and time, and it’s one that is rarely discussed or appreciated, and that’s the true cost of spending.

If you are still working for a living and not yet living off savings and pension income, every spending decision you make has a time implication. Or to be more precise, a working time implication.

For example, let’s say that you want to buy a new coat for the winter and the cost is £120, and you earn £15.63 an hour (£30,000 per annum assuming a 40-hour week). Your net take home pay is therefore £12.46.

Disregarding costs you incur getting to work and things like childcare, we can see that the £120 coat costs you 9.6 hours of work (£120/£12.46). By assessing spending decisions, particularly for non-essential things, against the time spent working to earn the money to fund them, you can see the true cost.

Using the same earnings example above, I’ve set out the working time cost of a range of typical spending items. Clearly the true time cost to you of purchases will depend on how much you earn after tax, but it’s a sobering thought to think that you might have to work for a third of the year to afford a new car!

 Spending item Number of working hours cost

Holiday @ £2,000 128

iPhone 11 @ £795 (with trade in) 51

Mini Hatchback @ £10,000 640

Eating out at restaurant £80 5

Streaming (Netflix, Amazon, Now TV) @ £276 18

There’s nothing wrong with spending money on things that make life more interesting or fun. But the more intentional you can be about your spending, the less likely you will be to both spend more than you should and regret the purchases you make.

Spending is time, so spend both wisely.