Not Spending Money Could Be Costing You Free Time
How I realized my obsession with not spending money was costing me a ton of free time
Because I lost near enough the complete use of my hands for a period, I was forced to buy a lot of aids. The result is that I learned something, one of the worst ways I was wasting time and money was by trying to save money by not buying things.
Maybe this is something that’s really obvious and many people know it, it is just that I didn’t know it. Who knows? But through my injury, I discovered that stubbornly trying to not spend money can be one of the most certain ways of costing yourself time and money.
Now everyone knows that time is way more valuable than money, I knew it, I just didn’t realize that frequently money can seem more valuable than time because you don’t realize the power of that money to buy you time.
For example, consider this, dishwashing machines are expensive, and I never thought of buying one because I didn’t want to waste the money — or rather I’d prefer to spend the money on other things, like saving for holidays or buying new shiny gadgets. But not being able to wash the dishes with my hands (because I couldn’t use them) taught me something.
That I wasn’t saving money, I was costing myself money by costing myself time.
That’s because not being able to wash the dishes gave me a load of time that I previously did not have.
I hear what you say, of course not having to wash the dishes gives you a load more free time, but dishes have to be washed, right? And dishwashing machines are expensive.
They are, but nowhere near as expensive as they seem when you consider what I call the free time cost-benefit.
And I should add this is not a post about why you should buy a dishwashing machine, it’s about understanding the power of money to buy time. For example, I used to spend twenty minutes a day washing the dishes, and I am talking specifically washing here, not putting the dishes away or drying them or anything like that, just the washing part.
Over the course of a year that equates to seven thousand three hundred minutes washing dishes, which equates to one hundred and twenty-two hours, or a little over five days. That means I was spending over five days a year washing the dishes.
Added up over the course of an average adult lifetime, those five days become approximately three hundred and four days.
That means that by washing the dishes for twenty minutes a day manually, the price I was paying was three hundred and four days of my life. And my reward for paying that price was being able to spend my money on other things.
And it is better to spend your money on other things like holidays or things like that, rather than spending the money on a dishwasher, right? So it’s a price worth paying, right?
That’s what I used to think, but how wrong was I.
The minimum wage in the UK is around £9 an hour, while dishwashing machines can be picked up for around £180. That means for twenty hours' work, twenty-two if income tax is included, a person who works for minimum wage in the UK would be able to earn enough money to purchase a dishwashing machine.
And here is the thing, over the course of one year, by purchasing a dishwashing machine, that person would no longer be spending twenty minutes a day manually washing the dishes and so would gain an extra one hundred and twenty-two hours of free time a year.
So, for twenty-two hours of work, they would have gained themselves one hundred and twenty-two hours a year of extra free time.
If that person, I’m going to call him Bob, if Bob elected to use that extra free time to earn money at minimum wage, then he would earn close to £1,100 before tax — if a person earns more than minimum wage, the maths become even more interesting.
That is what I call the free time cost-benefit ratio.
Yes, I made a name up, or at least I think I did, or at least I can’t seem to find anything on Google about such a ratio existing, if it does and you find it let me know in the comments and I will give acknowledgment (or change the name if it means something else).
With that said, back on topic and apologies up front, I’m going to use a maths equation here to show how to work out what I call the free time cost-benefit ratio of a purchase:
The amount of free time a year the purchase will buy you — (The cost of purchase/your hourly wage) = the amount of free time per year the purchase will buy you
Basically, if after putting the numbers into the equation you get a positive number, the free time cost-benefit ratio is in your favor, if it’s negative, then it’s not. And if it’s positive then that means it is cheaper in regard to time saved to make the purchase than it is to not make it.
Or rather this equation helps you to work out whether the free time you are buying is worth more than the price you are paying to buy it.
In the case of the dishwashing machine example, that means that by not purchasing the dishwashing machine, Bob would be electing to be paid only pennies an hour for manually washing the dishes, whereas if he had bought it, he would work for £9 an hour.
And I know what you’re thinking, you don’t get paid to wash your own dishes. But you pay a price and that price is time, and that time becomes related to money when you elect to save money that could buy you time.
In this case Bob, and we will say he is eighteen years of age, Bob, at eighteen years of age, if he wanted could spend £180 to purchase a dishwasher, which would only at UK minimum wage take twenty-two hours' work to pay for. But instead, he’s electing to save that £180 by working three hundred and four days of his life.
To really put that into perspective, that means that by not purchasing the dishwasher, Bob is electing to manually clean his dishes at a rate of 2p an hour.
The reason he is electing to work for that price is down to the fact that he could work twenty-two hours at £9 an hour and purchase a dishwashing machine, but he is electing to work twenty-four seven for three hundred and four days to save £180.
I am going to repeat that just so it really sinks in. He could work twenty-two hours at £9 an hour and purchase a dishwashing machine, but he is electing to work twenty-four seven for three hundred and four days of his life to save £180.
That’s not the full story. If Bob purchased the dishwashing machine when he was eighteen, and gained those extra three hundred and four days, then if he wanted to, he could work those extra three hundred and four days. If he did, working at UK minimum wage, he would be able to earn an extra £66,000 before tax over the course of his life.
Just to repeat that for emphasis, that would mean by spending £180 at when he was eighteen, Bob would have bought himself enough extra free time to earn himself an extra £66,000 over the course of his full adult life, which is a pretty epic investment return. For twenty hours work, buying yourself enough free time to be able to earn an additional £66,000 (for anyone interested, the yearly return works out at £1,100).
Obviously, I should add that not everyone even if they have the time can work an extra three hundred and four days over the course of their life, or even an extra one hundred and twenty-two hours a year. That’s because there may not be enough hours available for them to work any more than they already do. Also, not everyone wants to work an extra hundred and twenty-two hours a year.
The point is you wouldn’t have to, you could do whatever you wanted with those extra one hundred and twenty-two hours a year. I wish to be clear at this point, like said earlier this is not about purchasing a dishwasher, it is about a way of thinking.
Temporarily losing the use of my hands taught me that one of the biggest mistakes I was making, was not understanding the relationship between time and money. Frequently I thought that not making a purchase and saving my money for other things like holidays et cetera, meant that I was maximizing the value of my money. I was wrong.
That’s because the time it was costing me was worth a lot more than the money I was saving.
So, to reiterate, I’m not saying that everyone who does not have a dishwashing machine should go out and buy one, the point I am making, or at least trying to make, is the way we think plays a massive part in just how well we manage our time. And the way we think about how we spend our money, what we buy and what we don’t buy, can play a big part in that.
Simply by making the wrong choice, we could be costing ourselves a fortune in free time. And that’s a very bad thing because time is so precious and is a forever dwindling asset.
This is why I truly believe that if you can buy yourself more time to do things that you enjoy, whether that be through buying a dishwashing machine if you don’t have one, upgrading from your super slow computer to a new one which can do things in half the time. Whether that be through buying a new vacuum because your old one is so rubbish it takes you twice as long to clean your house with as it would take with a new one. Whether that even means changing from carpets to tiles to save yourself from having the vacuum so much in the first place.
It doesn’t matter what it is, all that matters is that if you can buy yourself more time to do things that you enjoy, I truly believe it is imperative that you do so. I also truly believe that working as a means to earn money as a means to buy yourself as much free time as possible is one of the smartest ways of working.
If you don’t have the money then that is one thing, but a big mistake we can make, that I used to make, is that when I did have the money, instead of making smart purchases, I attempted to save that money for other things and in doing so cost myself not only money but time.
Meaning I was working for less when I could have been working for more.
Literally, everything affordable that you can buy that would buy you more free time, I truly believe that you should be buying — or at least working towards buying — because buying free time is buying freedom. And the more freedom we have, the better the lives we live.
Literally, money buys you freedom, you work to earn money to buy yourself freedom. And the more you use your money to buy freedom, the better the value you get for your money.
That’s why I believe that a great way to increase the amount of free time that you have, the amount of freedom that you have, is to always consider the free time cost-benefit of spending your money.
Will spending that money buy me more free time over the course of my life than the cost of saving the money? Ask yourself that question over and over.
If the answer is yes, spend the money. If you don’t have the money, spend some time saving that money up and then spend it. Your reward will be more free time, which you can use to make more money, go on more holidays, or do whatever you want.
Or better yet, your reward will be the knowledge that you have bought yourself a little bit more freedom. And who doesn’t want that?
I certainly do.
This is why I now make certain that I use my money to buy myself as much freedom as I can afford. Meaning no more stubbornly refusing to buy things that could massively benefit my life under the mistaken belief of saving money.
No, I now spend money under the correct belief that doing so is much more cost-efficient when it comes to buying yourself free time.
That’s all from me for today, thanks for reading!
If you found this post of interest you may also enjoy the following:
Top Fifteen Ways for Boosting Your Available Free Time
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