This is a guest post from my friend Chelsea Fagan, founder of The Financial Diet. It originally appeared on her blog, and I thought it was the perfect follow-up to everything we’ve talked about this week.
There are a few things I like to do as a kind of “personal housekeeping” on a quarterly basis. Most are very common: I love to do deep cleanings, mini-home decor revamps, visits to faraway loved ones, and — hopefully — at least one or two of the medical appointments I’ve almost certainly been putting off. But I also now, since starting TFD, include several financial check-ins with myself that give me the same general feeling as cleaning out my closet and donating half my wardrobe, but which are much more about numbers on an Excel sheet, or more existential thoughts about who I am and what I want, financially. I spring clean my wallet, so to speak, but it would be more apt to say I spring clean the part of my brain that deals with my wallet.
I’ve made no secret about the fact that list-making has become my number one activity, about everything from the things I’ve got coming up for work, to the details of bigger projects, to meticulous travel packing, to the things I’ve already accomplished. These lists are also, it probably goes without saying, a huge part of my financial check-ups. Lists keep me on-track and focused, and being able to open my phone or laptop on a whim to scroll through the notepad app (yes, I know, there are more efficient list-making apps, but I love my notepad!) feels like a security blanket. It’s allowed me to do more in the last year than I’ve done in the last four combined, and I haven’t neared the apex of my organizational capacities. I have a long way to go…
That being said, keeping close track of my financial progress (especially in clearly laid-out, list-or-spreadsheet form) has the added benefit of helping me understand who I am financially, and where I’m headed, in a more macro sense. As I mentioned, taking stock of my goals and how much better I’m getting at stuff like saving and budgeting is a huge part of those quarterly “spring cleanings,” and since I’ve gotten to the point where basic financial skills are no longer a challenge for me, I’ve started to become more critical with the questions I ask myself, and the goals I set. A big part of this has been, in ways both financial and existential, setting a value for each hour, day, and year of my life. I do my best to set it in dollars — how much do I charge for a certain project, and why? — but I also try to do it in tasks. Which tasks are worth it for me to do myself, and which ones can be delegated or paid for?
There are obvious ways to deduce the raw value of an hour when you’re working a full-time job, simple calculations to make to see how much you’re really charging every time you give your employer a day. But to me, just saying, “Okay my job says X on paper but I work X more hours than full-time, therefore my actual pay is X” is only half of the picture, even if it’s very important to consider and improve. Because the truth is there are other ways we measure wealth and success, many of which have to do with the amount of free time we have to do the things we love, and the job that doesn’t pay the most competitively might also leave you with more of it to enjoy. It also might leave you less stressed and anxious, which are huge components of how valuable our time is. A week’s vacation where you can’t stop checking your email or complaining about work is worth a day’s vacation where you truly relax.
So it’s important, then, to find a kind of personal algorithm for what you think an hour of your time is really worth. For me, I have found it very useful to divide my hours into categories like “working,” “loved ones,” “learning,” and “personal joys.” For work, I’ve tried to raise the dollar value of an hour of my time in terms of the articles I’ll write freelance — I almost never freelance write anymore, but the rare ones I have done recently have been about double what I would have done a piece for even at the beginning of the year. This isn’t because I think I’m the best writer, or so incredibly important, but the truth is that my professional time is so occupied, and there is nearly always something I could be doing with TFD, so the few work projects I take on outside of it, I have to value very highly.
Similarly, if you are looking for side gigs outside of your main job, or looking to move companies or renegotiate your salary, it’s important to break down your work-specific hours as much as possible and see what your realistic goals should be. For side gigs, is there something like babysitting where, when the kids go to sleep, you could work on something else and kill two birds with one stone? Those kind of gigs often pay well in time. If you’re negotiating a raise, can you point to something specific you’re doing that’s already above your current title and pay grade? How good of a handle do you have on your work time, and how to maximize it? If we’re not constantly assessing how we’re spending our professional hours, we are almost doomed to waste them, and for much less than we’re worth.
This also means the tasks we take on should be well-measured. There are simply things I won’t do anymore, and outsource the task to someone I’ve paid in some capacity (either at work or outside of it, such as the people at my laundry service, or even my little sister who painted the whole TFD office), because there is a very low yield on that time for me. And while there are some hardcore finance people who will show you every single place you could scrimp and save by doing everything yourself, it seems much more important to actually look at what you could accomplish in that time, and what it would bring you, before you decide if the raw dollar amount is worth it. (And besides, sometimes by doing everything yourself, you end up wasting both money and time: something I’ve learned in many ill-conceived DIY projects throughout my home.)
But as I mentioned before, looking at your hours and their value only through “How much money can I make in X time” is silly, because there are many other, non-financially-motivated ways to spend that money. There are distinct times when I will forgo more money or more professional achievement because I want to spend time with people I love. This year, on our annual trip to the beach with our big friend group, it’ll be the first time I take a few days completely offline. I haven’t had a non-working vacation in years and, while I don’t regret those choices, I know that the money I’ll be giving up for those four days will be nothing compared to the sweetness of being able to detach with my favorite people. I’ve valued those hours extremely highly, just not in money. (By the same token, fading away from various friends/acquaintances who weren’t bringing me much this year has been an active stab at raising my value in this area by ensuring that the time I spend with people will all be time I’m happy and excited to spend, and won’t feel as though I wasted.)
And in order to continue evolving as a person, growing and taking care of yourself and expanding what you’re capable of, you have to also be willing to put in a certain amount of hours on things that won’t pay you. For my “personal joys” and “learning” this year, I’ve dedicated time to things like learning Spanish, cooking nearly every day, reading a certain number of books and articles, long walks with my dog, and work travel. There are also a lot of things I do to get better at my job for which I’m not paid, and the hours will never be clocked. But forcing yourself to decipher between “I am being underpaid because I did X thing and it wasn’t immediately reflected on my paycheck” and “I went the extra mile on something which may not pay off today, but will pay off in the long term, either at my job or with me as a person” is crucial. You should be demanding with your value, but not greedy — we should all be, at least sometimes, giving our time to things that don’t immediately grow our bottom line.
Ultimately, it’s up to you to always be assessing how you’re spending your time in the various categories of what’s important to you, and making sure you’re getting the most out of it. Only you can decide what you are worth, and advocate for yourself in order to get it. But remember that that value does not stop in dollars, and it doesn’t only exist in the workplace. There is immense value to everything we do with our time, as it’s the only thing we can’t buy more of. Use it in the way that makes you feel most happy, most fulfilled, and most appreciated — inside and outside your checking account.