Every now and then when I travel, I have to decide on if I want to book a flight out of the local airport or drive to the larger airport 100 miles away. Invariably the local airport will be more expensive. But what is the break point for when the increased cost is “too much”? How much personal value do I give to my own time?
Break It Down
The drive to the major airport is going to take 2 hours, it will take me 30 minutes to park and catch a bus to the terminal. Even waiting in the ticket line and security gate will add another 45 minutes. The eventual trip home will be another 2 hours of driving and 30 minutes of getting back to my car.
The small, local airport takes 20 minutes to get to and I have never needed to spend more than 10 minutes total waiting in lines. Also, it only takes 5 minutes to park the car and walk to the departures.
In total, the less expensive airport will take up an EXTRA 4 hours and 45 minutes of my time.
At my work I am paid ~$52 for each hour of my time – just the base rate, not my “Your Money or Your Life” actual pay. So, if I believed my time was worth what my employer pays me, the personal value of the time I save by booking my flight through the local airport is ~$247. If the local airport tickets are less than $247 more than the major airport, it is “worth it” to spend more and save myself 4 hours and 45 minutes doing something else.
However, in my own personal case, I value my personal time much more than my employer values my time. I value my time EVEN more if it is time NOT spent traveling in traffic or waiting in line.
My Personal Value
When it comes to traveling by myself, I give myself a rate of $75 per hour. I have a hard time thinking about the normal things that happen frequently in my life that I hate more than solo travel. $350 EXTRA is the top limit I would be willing to spend to fly out of the local airport instead of the major one 100 miles away.
That is only factoring in the personal value of MY TIME. Other factors exist for almost everything – such as mileage on my vehicle. At the current IRS mileage rate of $0.545, the round-trip costs $109 to the major airport. Also, the more time taken, the more factors like hunger or thirst begin to impact the overall cost. But this post is just about the personal value of your time, so I won’t bemoan the other potential components.
Not All Time is Equal
My personal value changes significantly depending on what I am doing. For example, if I am traveling with my wife, I don’t mind the extra time because I am still spending that time with her. I would be less willing to fly out of the local airport even with a lower difference in cost between airports.
If I am spending time doing something I enjoy doing, my hourly rate can even turn NEGATIVE. (I pay to spend my time doing things)
For example – I am willing to pay money to be entertained while spending time with my wife. My personal value would be -$5 per hour for something like a movie theater. I’m not able to interact with my wife, so it is less valuable to me. If I can interact with her (like dinner or a wine tasting), my personal value decreases even further. My personal value really plummets if I can spend time with my family, interact with them, AND experience something new/exciting/unique; to the tune of hundreds of dollars per hour in the negative.
The intersection with personal finance is understanding that you can find incredible (relative) value based on your personal value. I can hit all the important components mentioned above, and not actually spend much money. If I focus on the meaningful time I spend with my family, I can find all the components that I desire at lower relative costs.
Time is Limited
I am finding that, as I get older, my time is becoming more and more valuable to me. Every year I am willing to pay extra to not do things I don’t want to do. And, I am willing to pay more to do things I want to with my friends and family.
This trend is one of the main reasons my retirement goal involves such a large amount of money budgeted towards spending time with my family. One quarter of our planned retirement income is devoted to an annual family beach vacation that we pay for. Another quarter is set aside for my wife and I to spend on our own adventures, locally, regionally, and world-wide.
Not to get too morbid, but at some point we are all going to run out of time. It is our most valuable resource we have. Fortunately we have some control over how we spend our time. I plan on spending my next 4,263 days acquiring a $1,000,000 retirement account so I can spend my time in retirement in the most meaningful way possible.
I hope you look at your own time and start adding the personal value to yourself that you truly deserve and desire.
I’ll leave you with a quote from Alli Worthington (with tweaks):
Your time is limited and your energy is precious. Only let yourself spend time with (people) who add (value) to your life.