Off and on, I have found myself wondering what an hour of my time is really worth. Research highlights several ways to approach this question. In terms of saving funds, the best approach is to look at the dollar value of each hour in a day. This helpful calculator can do just that—and help you save more by using your time well.

Calculating the value of your time

LearnVest has developed a fabulous calculator to help you calculate the value of your time.

Two notes:

  • This calculator looks only at an hour's value in terms of working 40 hours/week.
  • If your weekly earning hours are different, you can email the LearnVest staff for help calculating your hourly value (email: editorial@learnvest.com).

What to do:

  • Visit: http://www.learnvest.com/2011/02/whats-your-time-worth/
  • Enter your estimated annual salary (net).
  • Answer the three questions (about money, time and priorities).
  • Click the green "calculate" button.
  • Look to the top of the calculator (in the black window) for the result.

PLE: an acronym to help you save

When you know your priorities, remember what you've learned, and continually seek new knowledge, you have the best chance of using your time well.

1. Priorities: You need to know what matters most to you so you can balance all other decisions against your top priorities.

2. Life experience: With some decisions, only life experience can really give you the history to avoid making costly mistakes a second time.

3. Education: You need enough information to determine if a decision about how to use your time is likely to deliver enough savings to make it worthwhile. When it comes to using your time to save funds, KCL offers these two useful tools to help you determine if "going for that deal" is worth your time.

Ways to apply these helps to save more

Once you know what an hour of your time translates to in dollars, you can balance costs versus savings to find the right choice. Here are three examples you can use as a guide.

Example 1: You will save $.10/gallon by driving 15 minutes (5 miles in traffic) out of your way (about $6) instead of filling up close to home. But that cuts into the time you spend helping the kids with homework.

  • You know one hour of your time is worth $15.00 (based on calculating an average net salary of $50,000/year with even responses ("3") to the LearnVest calculator questions.
  • That means 15 minutes of your time is worth $3.75.
  • Your net savings is $2.25 to drive the extra 5 miles for lower gas prices ($6.00 – $3.75).
  • Your choice – what do you do?

Example 2: You are exhausted and really just want to put your feet up, but the kids are hungry. You could make dinner (30 minutes of time) for $8 or order pizza for $12 (5 minutes of time).

  • One hour of your time is worth $15.oo.
  • That means 30 minutes of your time is worth $7.50.
  • Your true cost to make dinner is $15.50 ($8.00 + $7.50).
  • Your true cost to order out is $13.25 ($12 + $1.25).
  • Your net deficit is -$2.25 ($15.50 – $13.25) if you decide to cook dinner.
  • Your choice – what do you do?

Example 3: There is an unexplained charge of $9 on your phone bill. From past experience, it usually takes 20 minutes on hold just to talk to customer service.

  • One hour of your time is worth $15.00.
  • That means 20 minutes of your time is worth $5.00.
  • Your net savings is $4.00 to wait on hold to clear the charge ($9.00 – $5.00).
  • Your choice – what do you do?