Time = Money

Time = Money
Learn what you're worth and when to outsource.

Chelsea Greenwood

Ticktock. Ticktock. Ticktock. For some, that’s what the passage of time sounds like. For others, it goes more like this: Cha-ching. Cha-ching. Cha-ching.

The most productive people—from Fortune 500 CEOs to 20-something yuppies— view their time in dollars and cents. Yet many of us persist in thinking, “It’s cheaper to do it myself,” or “Why pay someone else to do something I can do?” The answer, of course, is that your time is precious and could be spent on activities that ultimately reap great rewards—financial, as well as personal.

Even if you aren’t a victim of your own misguided work ethic or thriftiness, it’s easy to get sucked into a time-wasting task—filing, doing laundry, entering data. You think that chore will just take a few minutes, but over time, all the busywork adds up.

So how are you budgeting your time? Just as we scrutinize home and office budgets down to the last penny, it’s important to look at how we’re spending our time and whether or not each activity is a worthy allocation. (See sidebars on the following pages to help you figure out the value of your time and what’s worth doing yourself.) Seriously, why spend an hour on data entry—which you could pay someone maybe $10 an hour to do—when you could spend those 60 minutes preparing a proposal that could result in thousands of dollars in returns?

That’s just what Debra Cohen wondered. This self-described “mompreneur” started a home-improvement contractor referral business in 1997 when the first of her two daughters was born. “In the beginning, I tried to do as much as I could on my own to save money, and, in the end, it cost me in time,” she says. “I quickly realized that I needed help in order to focus on the money-making aspects of my business.”

Resourceful Outsourcing

Cohen was pleased to find outsourcing more economical than she thought. After hours spent unsuccessfully trying to design her own logo, she figured she’d have to hire an expensive agency. But she found a retired artist for much less.

When her business, Home Remedies of NY Inc., started to really take off, Cohen found herself at another critical juncture. “I couldn’t keep up with my job orders, follow-up calls, invoicing, etc. We had just planned our fi rst family vacation in more than five years and couldn’t figure out how I could possibly leave my business.” At that point, Cohen found a local mom who was looking for work. She trained and hired her immediately, and the woman still works with her as her virtual assistant.

Today, Cohen’s workforce also includes a webmaster, an accountant and another stay-at-home mom who used to practice law but who now handles structure and trademark issues. “With the help of my outsourced workforce, I’m able to focus my limited work hours [three to five a day] on client follow-up, networking and contractor recruiting—the three most important aspects of my business,” she says.

Cohen is equally judicious about her personal time. As her business thrived, she hired a housekeeper and gardener. And when work is busier than usual, she doesn’t hesitate to order dinners in or buy prepared meals. “At the same time, I try not to compromise time with my family. I may order in dinner, but we will still sit down at the table together to eat as a family. After all, they are the reason that I decided to work from home in the first place.”

Practicing Interdependence

With so many online resources available, as well as a sizable population of unemployed people eager for freelance or contract work, it’s easier than ever to outsource at work and at home. For many people, though, hiring others to do household or personal chores is a bigger stretch than outsourcing work-related tasks.

“Most people ‘get’ that it doesn’t make sense to try to tinker with your car if you’re not a mechanic,” says Laura Stack, president of The Productivity Pro Inc. “But you know how to do the laundry, so you feel guilty for paying someone else to do it. What are you working so hard for? To earn a bunch of money just to work hard again at home? When do you get to raise your children, volunteer or spend time on yourself? The money we spend on services is far better than any other ‘stuff’ we could have bought with that money. Take a deep breath, and join the millions of people who spend some of their hard-earned money to buy a life.”

Stack suggests outsourcing is a way to practice interdependence. “Service providers rely on you for their paychecks, and you rely on them to free up your time,” she says. Many workaholics have trouble practicing interdependence because it involves trusting others, relinquishing control and, sometimes, funding another paycheck, she says. (See sidebar below for warning signs that you need to delegate more.) But interdependence is crucial to productivity because no one person can or should do it all.

What Money Can’t Buy

Yet, there are some activities you cannot delegate or assign a dollar value. “The danger to putting a money value on one’s time, particularly if it is high, is that things that are important to do end up seeming too expensive,” says George Loewenstein, professor of economics and psychology at Carnegie Mellon University. “If you start calculating the effective monetary cost of doing these things, not only will you be likely to not do them when you should, but even when you decide to go ahead and take the time, you’ll find yourself distracted by thoughts about how much it’s costing you.”

He remembers keeping a mountain-biking date with his son rather than taking on some well-paying consulting work. “The thought of how much the biking was costing did detract from my complete enjoyment of the day, but, afterward, I was very happy and relieved that I had made what I am now certain was the right choice. Years later, the money will be a drop in the bucket, but spending a day mountain biking with one’s son is irreplaceable.”

Loewenstein’s story illustrates an important rule of thumb: “The things you should avoid putting a price on are things that involve people—family, friends, students, colleagues,” he says. “Relationships take time, and if you put a price on the time you spend building them and enjoying them, you will almost always undervalue them.”

It’s also important not to undervalue your relationship with yourself, which you can cultivate through hobbies and alone time. You need that time to recharge, and studies show you’re more effective at work when you participate in activities you really enjoy, which actually help you be more creative and better at problem solving.

“Americans work some of the longest hours among citizens of wealthy nations; we don’t take much vacation and we retire late in life,” Loewenstein says. “And the less time we take off, the less we become capable of enjoying leisure when we take it. Our leisure skills become atrophied, and our leisure time ends up taking on the frantic character of our work lives. We have developed a tremendous engine of prosperity, but now we need to figure out how to use our time better to enjoy that prosperity.”


http://www.successmagazine.com/time-money-outsource/PARAMS/article/953