How many times in a day or in a week do you tell someone: I don’t have the time? This is something we say very commonly to everyone- friends, colleagues, relatives or even the spouse and kids.
This is perhaps the most common thing that we say when someone asks us to do something or the other or when we’re not willing to do something or when we’re just bored.
But if you pause to think, you will realize that these words: I don’t have the time, actually have a much deeper meaning.
These words directly mean that you’re not willing to spend your time, money and effort- all the three combined on something. Because, whenever we give time to something, we’re also giving our efforts and our money.
You might not be actually paying someone when you give them time. However, you’re giving them several other things. These include your efforts, attention, and some thoughts too. Because, nobody can do anything without attention, thoughts, and effort.
Even when you’re watching this video, you’re giving your attention while thinking about what I am saying. You’re making an effort to understand me and my way of speaking.
However, did you know that everything you give has value in money? This would definitely sound strange to you. So, continue watching as I will explain how your time is money and why it matters. I will teach you, how to calculate the value of time.
Let’s start by defining what we mean by the word ‘time’.
What is Time?
First of all, even scientists are unable to provide the exact definition of time. There’s a reason for this. Time just seems to flow, without stopping.
A simple question that scientists ask and are unable to get any answers is where does the past go and from where does the future emerge? Is it an automatic sequence or something that we’re pushed into?
For example, nobody can stop time. And unless anyone of us dies today, it is unavoidable to see tomorrow. We can change anything in our life such as space and place by moving somewhere else.
But we can’t change the time. We can only set our clocks or watches to any time, such as while traveling abroad. But overall, nobody can control time.
Time just happens- it continues without any human control. Despite the latest technologies, nobody has invented a method of stopping time or even the time machine that allows us to go into the past or look into the future.
So, What is Time?
The time that we know is a simple mathematical calculation. It is based on the fact that the Earth revolves around the Sun. This rotation puts the Earth in various positions against the Sun.
At some point, one part of the Earth is nearer the Sun and we can see the light. This is called the dawn to dusk or daytime. And as the Earth rotates without stopping, the same part which is nearer the Sun now moves away and that’s what we call nighttime.
This is a period from dusk- when the Sun sets, till the dawn, when the Sun rises again. The daytime and nighttime make a full day.
It takes the Earth some time to complete this rotation. That time is 24 hours. Therefore, our day which consists of daytime and nighttime is spread over 24 hours.
For mathematical calculations only, one day is divided into 24 hours. These 24 hours are further divided into minutes and seconds. And second are again divided as milliseconds, which are used for very crucial calculations such as manned space programs.
There’s a reason why the time we know is purely a mathematical calculation. It is based on the simple assumption that the North Pole faces the Sun for a specific period and the South Pole for a specific period. This causes day and night.
But, there’re certain countries such as Norway and the Alaska state of the US where there’s no “night,” during certain parts of the year. That happens when the North Pole continues to face the Sun.
At this time, Antarctica and certain other parts of the world see continuous and long periods of darkness. However, these places too observe a 24-hour day.
Therefore, all of us humans use this 24-hour clock to calculate our time. And a period of 365 days is taken as a year. There’s a calculation for why 365 days form a year and not 200 or 500 or any other odd figure.
That’s because each year consists of a Summer Solstice when our part of the Earth is closest to the Sun and a Winter Solstice when it is far away from the Sun.
Now that you know that time is a mathematical calculation, let us see what is the ordinary definition of time.
The ordinary definition of time is the work or effort that we exert for some hours or days. Time also includes the period since our birth, education, work and other things. These depend on what we’re trying to calculate or find.
For example, if I have to talk about my past, I can refer to a specific year such as 1985. And if its future, maybe I could speak about 2085.
At the same time, when I say I am employed, I mean that I give only a specific portion of my day to do some activity, which gives me money in return. Yet, when we say we’re employed, it means that we’re doing that specific activity over the past several months or years.
And when we say that we’ll go to work today, we actually mean that we’ll be giving about eight hours for the specific activity of working for our employer or on our business.
Look at these words in a different way. If I say I am working, means I am doing some activity right now. In simple words, we say we’re busy. This means, we’re using time to do something and we need more time to complete it.
As you can see from these various explanations, there’s no exact definition of time. Therefore, you can define time in the way you wish.
Does Time Have Value?
So that brings us to the next question: Does time have any value? I mean, all of us get 24 hours every day free of cost. We don’t pay anything to get this time. Whether we want it or now, we get time.
Sometimes, we don’t want time, because we’re expecting something bad to happen. In such times, we want time to freeze and stand still.
Then there’re other times when we’re expecting something good or happy and want the time to run fast.
But we can neither make the time wait and nor can we ask it to move in the future. Also, we can’t go back in the past to repair some of our past deeds.
Therefore, we’re left with only two options.
The first option is to let the time go away without doing anything. The second option is to take some efforts that will get us some good results.
For example, you can simply sleep and do nothing or sit staring in space or watching TV or playing on your mobile, to waste time. In such cases, you’re not doing anything to make your life better.
Or, you can do some work or studies or anything else that makes you richer, more educated and knowledgeable or happier in some ways.
When we do something that is helpful for our life, we are giving value to our time. That also includes our daily sleep, because we need it to stay healthy. It also includes entertainment because it helps to relieve mental stress.
These efforts or activities that we do give value to our time and help us to lead better life.
Also read: Top Time Management Tips
How to Calculate the Value of Time?
This brings us to the core of my talks today. How do I calculate the value of my time? Or, how do you calculate the value of your time.
In foreign countries like USA, they have various ways to calculate the value of time. That’s because they follow an altogether different system of calculating work and pay.
Instead, I will explain to you in simple ways how to calculate the value of your time.
1. The Eight By 24 Law
To calculate the value of time, we have to consider what is known around the world as the 8 x 24 or eight by twenty-four law. This law applies to every person that is earning money either by business or work.
This is a very simple law and you can easily understand it.
Most of us work for eight hours a day, on average. Of course, some people work more, and others work less, depending on what they do to earn a living.
Everywhere in the world, a normal working day for most people consists of eight hours or one-third of the day.
However, these eight hours should pay you enough money to live for at least 24 hours a day. That means, the wages you earn should be enough to pay for your food, clothing and shelter during these 24 hours.
Unless you have money, you can’t eat and unless you have money to rent or buy a house, you can’t sleep properly. Also, our society demands that we should be dressed unless you’ve some privacy at home.
Therefore, if we see, our expenses during these 24 hours don’t really stop. We need clothes even while sleeping. Additionally, we might need a bed, a fan to stay cool or a heater to keep warm, blankets, pillows and other stuff.
We also need food to nourish your bodies during these 24 hours. Because, without food, we will become weak and fall sick. That means, we can’t earn money.
Some people like laborers live for the day. They can spend whatever little wages they get on their food, clothing, and shelter and if possible, save a little for days when they don’t get work.
But a salaried person or a businessperson has a stable and fixed income so they needn’t worry about next meal or shelter.
To get the money during these eight hours, we need to do certain activities, whether at work or at business. These activities depend on our education and skill. That means, we’re selling our skills and knowledge during these eight hours.
2. Cost of Working
Since you have a clear idea of how the 8 x 24-hour rule works, let’s go to the next point, which is the cost of working. So, what is the cost of working?
You would wake up, shave, shower, makeup and do lots of other things to get ready for work. The things you use to prepare for your work cost money. The ironed clothes that you wear also cost money in two ways. You’ve bought the clothes and are spending on maintaining them by washing and ironing.
Then, there is cost that none of us consider. And that is the cost of traveling between work and home, or what’s commonly known as commutes. It is estimated that on average, an Indian office-goer spends Rs.2,501 per month only to travel between home and office daily.
If you see your salary, normally an employer doesn’t pay you a ‘kit allowance’ its known in some places, for dressing up and grooming yourself. This means, you are bearing the cost from your salary.
In some cases, an employer might pay you a conveyance allowance of money to commute between work and home. However, this will be counted as part of your overall income and will usually be paid with the salary. It forms part of your package and doesn’t come separately.
Therefore, when you calculate your actual salary, deduct these costs from your income.
3. Bonuses and Other Income
To find the value of your time, add up all your monthly salary to arrive at an annual income. Now, deduct the taxes or other compulsory expenses that you pay.
The amount will surely be lower. The next step is to deduct the money that you actually spend to go to work, such as transportation and grooming. The annual income will drop even lower now, at this point.
However, this is nothing to be disappointed about.
After you have deducted these two amounts, calculate all the bonus, overtime payments and other income that you earned during a year or month or arrive at an estimate. Add this figure to what remains of your salary after the two deductions- tax and your expenses to work.
And this final figure that you get is divided by 365 days. I say 365 days because your salary is not deducted for any major or national holidays and festivals. Your salary takes into calculation the holidays and weekends too. Therefore, divide the amount by 365 days.
Once you divide the amount by 365 days, you will know how much money you’re making per day.
Divide this amount of money by 24 hours. You will see the value you’re getting for your money on any given day.
Also, divide the income per day by eight hours. This simple calculation will show how much money you make per hour.
The Simple Formula
Let us consider that I am earning Rs.25,000 per month. After deducting Rs.2,500 for commuting and another Rs.2,500 for my personal needs such as cosmetics and toiletries, laundry, water, rent and entertainment.
This means, I am getting an average Rs.20,000 salary per month. This is Rs.240,000 for a year.
Now I divide Rs.20,000 by 30 days per month. I get a figure or Rs.666.66 per day.
Divide this amount by 24 hours of the day. I arrive at an hourly pay of Rs.27.775
Since I am alive 24 hours and need to spend on myself and family, I have to be able to afford everything in just Rs.27.775 per hour.
As I explained earlier, just because my family and I are asleep doesn’t mean that my expenses have stopped too.
However, income per hour is usually calculated on the simple formula of dividing Rs.25,000 by 30 days, which is Rs.833 per day.
If you divide this by eight hours of work, you arrive at Rs.104.35. This calculation doesn’t show the value of your time because it doesn’t consider the time you spent on getting ready to work or commuting between the workplace and home.
In simple words, it means that a person with a salary of Rs.25,000 per month is earning only Rs.27.77 per hour.
Understandably, this might come as a shock to many of you who are earning Rs.25,000 per month or even lower.
But there is nothing to be sad about.
Since the value of your time comes to a very small amount, it should encourage you rather than discourage you. I would suggest that you find some extra work by freelancing or opening a blog or YouTube channel or even doing a small business from home. That can help your value of time per hour to increase.