welcom to America today with a new article about Time’s money, but how much? Here’s what Americans think an hour of their time is worth
Time is precious, and Americans know it. To gauge how precious, financial planning firm Empower asked 2,204 adults between March 11 and 14 how much money they thought an hour of their time was worth.
On average, Americans valued their time at $240 an hour. And based on a standard 40-hour week, that puts their perceived value at $499,200 a year, or nearly eight times higher than the average U.S. salary of $59,384.
Because people value their time so highly, many are willing to spend money to get a little more or achieve a happier life, the survey showed.
“It’s a race to find happiness, whether that’s a better work-life balance or a $7 daily cup of coffee,” Empower said.
What age group values their time the most?
How much value you put on time depends on your age, the data showed.
Millennials (born from 1981 to 1996) place the highest value on their time, saying an hour was worth $328.84, with a quarter of them pegging that at more than $500 – the highest percentage of any generation. Only 6% of Boomers priced an hour at $500 or more.
Gen Z (born from 1997 to 2012) said an hour of their time would cost $266.92.
Gen X’ (born from 1965 to 1980) said their time was worth $215.90 an hour.
Boomers (from 1946 to 1964) said an hour of their time is worth $137.19.
Millennials value their time more because of their sense of lost time, like the 2008 financial crisis when many entered the workforce, or the volatility later caused by the pandemic. Record high levels of student debt and some of the highest inflation and mortgage rates in decades, which Millennials say have kept them from buying homes, have also rattled them, Empower said.
How much would you give up to get back an hour of your time?
Time is so precious that 26% of Americans said they’d take a 15% pay cut for more free time. Millennials (41%) were the most willing to do so, Empower said.
Americans also would pay someone to do things for them to regain time.
Thirty-six percent said they’d rather pay more to get an item delivered instead of driving 10 minutes to get it, the survey said.
More than 2 out of 5 Americans said outsourcing household chores improves work-life balance. One-third of Gen Z would pay up to $5,000 a year to save time by forgoing tasks like cleaning and yard work, and 36% of millennials would shell out as much as $10,000 for someone to take on in-house chores and cook meals.
Americans don’t like managing their money. More than one-third of Americans procrastinate when it comes to money tasks like paying their bills, and 26% said they’d spend $5,000 annually to have someone else manage their long-term financials, investments, and savings.
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What makes people feel wealthy?
Wealth isn’t just about your bank account for most Americans. Sixty-three percent said they “feel wealthy” if they have enough time to spend with family and friends, the survey said.
Nearly one-third feel comfortable taking on debt if it buys more free time or a memorable experience.
Almost 40% of Americans say saving time is more important than saving money, and that figure rises to 52% for Millennials, the survey showed.
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What about retirement savings?
Almost half of Americans feel they’re running out of time to save for retirement, even though 44% say they started putting money away early enough, the survey said.
Forty-three percent said they wish they could go back in time to start saving sooner, but nearly half said they’d rather have a longer retirement with less money than retire later in life with more, the survey showed.
Generally, Americans remain “optimistic,” though, and “people may be further along than they think,” the survey said.
The average 401(k) balance is $291,810, and for people in their 50s approaching retirement age, it jumps to $580,259, according to Empower Personal Dashboard data.
What Americans Think an Hour of Their Time is Worth
Now we have to decide how much time 20 American dollars is. We could ask how much is a lawyer or doctor worth and get very different answers. So we have to ask something simple with a single clear meaning. People seem to understand the idea of wages per hour quite well, so the obvious question is “how much is your time worth?”.
While Americans may not know what their time is worth when producing many goods and services, they have a good idea of what their time is worth to them. Wages are a measure of the value of a worker’s time, agreed upon by the employer and employee. Therefore, we ask what wage does it take to make people allocate a piece of their time to spend money? In other words, what is the price of an hour of someone’s time? This is known as opportunity cost, the price of a foregone alternative. In this case, the value of the time spent working an extra hour versus the time doing alternative activities.
When the wages are increased or decreased, it becomes more or less worthwhile to spend resources on the alternative activity. In the case of the workforce, work at a given wage is the alternative to spending time on leisure, while an increase in demand for work means more opportunity to trade that time for money. This question is quite versatile and can be translated to any wage. Hence, an investigation on what 20 dollar earners think an hour of their time is worth can provide a window to many valuable insights about the workforce in America.