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How To Calculate the Value of Your Time

We make micro-decisions about our spending every single day.

  • Should you spend an extra $100 to have a direct flight, rather than have a 3-hour layover?
  • Should you spend an extra $10 to have your groceries delivered, rather than spend an hour browsing at the supermarket?
  • Should you take the time to go to a retail store to buy an item, or should you spend the extra $8.95 to have it shipped to you (and get it a few days later)?

All of these questions are driven by the thought that your time has value - depending on the tasks you're doing, your income, and the things that you spend your time on. When it comes to obtaining a new education, the amount of time you spend learning your new skills should weigh heavily on your decision of where to go.

LET'S RUN THE NUMBERS

There are multiple ways of calculating your time - and several people have gone to great lengths to create spreadsheets, calculators, and forums dedicated to the value of your time.

The easiest (and most simple) way to calculate the value of your time right now is to add up all the time you spend in your work, including take-home tasks, commuting, and other career-related extracurriculars like networking events and conferences. For most 9-to-5ers, this amount is actually well over eight hours per day. Divide that number by the amount of money you're being paid (including any freelancing or side gigs), and then you'll have your number. For individuals making between $40,000 and $60,000 annually, their time is valued at around $18-25 per hour. With this number, you'll have something to compare against when deciding how you want to spend your time.

If you're looking to advance your career or move into a new field altogether, re-do this calculation with your dream career's salary in mind. Now you'll discover how the value of your time has increased!

THE RELATIONSHIP BETWEEN TIME AND EDUCATION

Let's take traditional education as an example. If you spend four years obtaining a traditional degree (and subtract for four summers), you end up with 26,280 hours spent in the classroom, studying, or taking tests.

  • Four years = 35,040 hours.
  • Time not spent in school (sleep, weekends, extracurriculars, summers) = 24,090 hours.
  • Educational time = 9,950 hours.

Without accounting for the 43% of students who have part-time jobs, we will make the assumption that full-time students do not have any nominal net income during the time that they are in school. Given that the median hourly wage is $18/hour, students who are in full-time school for four years are missing out on a potential $179,100 earnings over four years (which equals out to $44,775 per year.)

Depending on the degree and credentials you're seeking, you may need additional years under your belt - especially for degrees in education, science, and medicine.

So before you jump into a four-year degree, ask yourself if your time might be better spent in a program that is fewer than four years. In most cases, college is seen as a great educational foundation, where students see monumental improvements in their communication, decision-making, and social skills. But if you're planning on obtaining a degree in philosophy or creative writing, it might make financial sense to go to a less-expensive school.

Because of the quick pace of technology and education, many people are turning to vocational skills training programs that are much shorter in length compared to traditional higher education. Just last year, almost 23,000 students graduated from coding and technology bootcamps, which average at just 14.1 weeks in length.

VOCATIONAL TRAINING: THE BEST BANG FOR YOUR BUCK

The numbers speak for themselves.

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TECHNOLOGY BOOTCAMPS

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CDL TRAINING PROGRAMS

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DIESEL MECHANIC TRAINING PROGRAMS

  • Average length: varies depending on program: 8 weeks to 1 year
  • Average cost: $1,000-$5,000 (source)
  • Average graduating salary: $29,777 - $65,892 (source)
  • FIND YOUR PROGRAM >