Time is money – and you can figure out how much it costs
A bargain may not be such a good deal when conditions associated with the purchase are considered. Being required to travel to get a bargain can be costly as your time may be better spent doing other things. The majority of eZonomics poll respondents place a high value on their time but there is a large variation.
This is not surprising as the value people put on their time can vary according to how and how much they are paid and how much free time they have. Financial education website LearnVest has come up with a calculator that estimates the worth of an hour of the user’s time. It makes the calculation based on the person’s income, their amount of free time and other factors. Other conditions that can push up the cost of a "good deal" include having to buy unneeded damage or breakdown insurance or having to take out a loan at an unfavourable interest rate.
The work-life balance and opportunity cost
Time cannot, and should not, be reduced to a monetary value in all circumstances. If travelling an hour to get bargain means spending less time doing what you would prefer, such as seeing friends and family, the opportunity cost – or the cost of not doing the next best choice – can be high. Economics professor and blogger Greg Mankiw notes this in supporting the decision by a popular author to charge a very high price for public speaking. Mankiw, like the popular author, would prefer to spend his time on writing and research. FT columnist Mrs Moneypenny has also mused over whether her time is really worth £3,000 per hour, citing song lyrics as part of her wake-up call.