commute

“Time is money,” my father used to tell me when I was a boy. He didn’t like how I dawdled with my chores. I didn’t understand what he meant back then. To me, time and money were two very different things. As a kid, I had lots of time but very little money.

Now, as a nearly fifty-year-old man who has written about personal finance for the past twelve years, I get it. Dad was right: Time is money — and money is time.

This notion is the central lesson of Your Money or Your Life, the personal-finance classic by Joe Dominguez and Vicki Robin. “Money is something we choose to trade our life energy for,” they write. “You are the one who determines what money is worth to you. It is your life energy. You ‘pay’ for money with your time. You choose how to spend it.”

The authors say that because you spend time in order to earn money, you’re also spending time whenever you make a purchase. This has some powerful implications.

• When you treat time as money (and money as time), you can better evaluate how to allocate your dollars and your hours.
• When you know how much your time is worth, you can decide when it makes sense to “outsource” specific jobs.
• When you spend less, you can work less. In a very real way, frugality buys time. But on a deeper level, frugality buys freedom — financial freedom, freedom from worry, freedom to spend your time however you choose.

Because of the time factor, Dominguez and Robin argue that you don’t earn as much as you think you do. You may be paid $33 an hour, but your real hourly wage is less than that. Possibly much less.