In this month’s edition of “Money Matters,” I talk about the importance of recognizing how much time in your life is spent on doing things you enjoy and how outsourcing even the smallest chore can have the biggest positive impact on your life.

Ask yourself this question: Do I value money over time or time over money?

Having worked with hundreds of clients over the years, one too common factor I’ve noticed—regardless of a person’s level of wealth—is time poverty!

Did you know research shows that people who value time over money and make financial decisions in that vein demonstrate greater levels of happiness, less stress, and better social relationships?

I’ll be the first to point out the counter position though: people who do not adequately manage their finances are likely to be stressed out, unhappy with their position in life, and more likely to argue about money with their spouse. However, when someone has reached a point of financial security, considering how you spend your time or if you should “buy time” can have a major effect on your quality of life!

I found some fascinating research from Ashely Whillans, PhD about time, money, and happiness (here’s a video from Dr. Whillans on her research about time: "Want to Be Happier? Value Time Over Money"). To use Dr. Whillans’ terms, I’d love to hear if you are a “Tina,” who values her time more than her money or a “Maggie,” who values her money more than her time.

I hope you enjoy this “Money Matters” episode! If you’d like to talk about how your time or money preferences are influencing your day-to-day life, or how your long-term financial plan might look if you were to buy more time, contact me anytime!

Money Matters: Time & Money Transcript

0:00:00.1 CJ: WTIP is pleased to bring you another edition of Money Matters, a monthly feature intended to help us understand more about managing our finances. Scott Oeth is a certified financial planner and adjunct professor. He's taught retirement planning and wealth management strategies to hundreds of financial professionals, and he's joining us now by phone. Welcome, Scott.

0:00:24.3 Scott Oeth: Good morning, CJ.

0:00:25.2 CJ: You don't moonlight as a family planner, do you?

0:00:30.1 SO: Well, the funny thing is after some meetings, I wonder if we're talking about finances or if it's more of a marriage counseling session, but, no, I don't have any certifications or designation or training in that area specifically.

0:00:45.0 CJ: Alright. Well, then let's talk finances, and you said you wanted to talk about the connections between time and money today. So what's on your mind?

0:00:54.5 SO: Yeah. To me, this is a fascinating topic, and time and money and personal finance are linked in so many ways. Back in business school, long, long time ago, one of the first things I was taught was time value of money calculation, there's the compound interest, and how you can compare dollars that might be received in the future to dollars today, and the impact of interest rates on inflation and growth rates, and so many others. We might take a look at taking out a loan to buy a major, hopefully, an asset, like a home, and working out that loan so we can pay it off over time, because we don't have the cash in hand right now. Or a family might consider taking out life insurance if they know that there are financial needs, financial goals that would need to be met, but if someone doesn't have the time to continue working to accumulate those dollars or to pay for them as they go, they can take out an insurance policy, just a financial instrument that provide those dollars in hand, up front, in the event of an unexpected death.

0:02:00.5 SO: So lots of ways that time and money are linked. But, CJ, would you believe it if I told you that I've worked with some people who have really strong financial position, multi-millionaires, people with very high incomes, but they're actually quite poor? And what they're suffering from... What I've seen is that they may have great financial affluence, but they're suffering from time poverty. And this is a very common malady, seems to affect people universally, from those who have very little money to those who have large amounts of money, especially Americans, we are really stuck in this trap where we suffer from time poverty.

0:02:43.7 CJ: Well, tell us more about that, is that something that's new?

0:02:48.2 SO: No, not necessarily new. And if you think of all these great labor-saving devices that have come up out along and across time from washing machines and fast food restaurants, and microwave ovens, and frozen meals, up to today's digital technology services. We have so many services that you can just pull up with the touch of your thumb. You'd think things are improving, but studies are showing that in terms of time poverty, it's not necessarily true. In fact, in some cases, they're getting worse. We're actually just filling our calendars with more and more obligations. And the technology that we have at hand seems to increase the time robbers, whether it's filling little spaces and gaps with more opportunities to work or... I think that something I'm trying to be conscious of is the technology gives you little throwaway bits of shallow fun and entertainment that takes up what time there is, instead of there being clean open spaces for more deep fun or quality relationship time.

0:03:52.9 SO: So, I've noticed this for a long time, but kinda recently came across some work by a professor from Harvard, Dr. Ashley Whillans, and she's done some fascinating research, and it's all about this. She has a Harvard Business Review piece that you can find online, you can Google it, called Time for Happiness. She has a book out called Time Smart. And just if you go into your internet browser and search for Dr. Ashley Whillans, there are some YouTube videos that come up, where she's giving lectures on this subject, and I find it just fascinating. But she's found that about 80% of Americans across the financial spectrum suffer from time poverty and that it can have stronger measured negative effects than being unemployed.

0:04:39.4 CJ: Wow. So that makes it a huge issue.

0:04:43.0 SO: Yeah, it is. And it's very interesting, you look at her work and what she finds is that some people value time over money, but not everyone. Many people, especially in our society, the way we're raised, the way we're trying to think, and being the pragmatist and the practical guy here who some people might have think because they need to, because of survival skills, most people value money over time. But she's found again and again in different studies that people who thoughtfully value time over money and view time as a precious resource, they tend to have greater happiness, they report less stress, and they have better social relationships.

0:05:21.8 CJ: Well, what kind of steps can we take to help ourselves in regard to time poverty?

0:05:29.2 SO: Yeah. I'm gonna give folks the permission slip here to thoughtfully consider spending some money on things that buy them quality time or to value their time as much as money. So again, what we talk about here on the radio is generalized advice, people need to make their own decisions. But I think... Take a look at Dr. Whillans work, watch some of the videos, maybe read the articles, they're right there online, consider reading her book and think about how does it fit into your life and are there decisions you're making... She has lots of examples about... She conducted one experiment where they gave people $40, and to one group, they said, "Buy something that you like, something fun." And to the other group, she said, "Use this $40 in a way that buys you time."

0:06:18.0 SO: And by now, you get the punch line that the folks who did something to outsource some piece of labor or maybe buy a... She gives an example, buying a coffee maker that you can set it up the morning before and it has a timer on it, instead of dealing with the race in the morning, something as simple as that, she finds that the people that somehow used that $40, even that small amount to buy some time, were happier with the results, so that's big.

0:06:47.5 SO: She talks a lot about outsourcing, and some of these things are a struggle for me. I feel like, "Well, wait a minute, that's just being a little indulgent here, hiring... " I still mow my own lawn and I shovel my own snow, in a way I kinda like it, and that's kind of the key. She says, "If there's things that bring you joy, that give you a positive energy in your life, that's fine. But if there's something that's really... It sucks your time and it's not fun for you, those are the things you really wanna try to think about using your dollars to eliminate."

0:07:18.3 SO: A big one she points to is vacation days. I've heard this before, but she points to it again. We're terrible at taking our vacation days. And she equates it to, "Hey, if your employer had stacks of money sitting on the table in front of you, and said, 'here you go,' would you leave it?" No, no one would leave it there, they would take the stacks of money. But those days, those vacation days that are unused are really a financial equivalent. I think from my point of view, when I'm working with folks, one of the things I see is "you can be taught and hardwired to be good with money," and I'm doing the air quote thing here, and thinking that you should save and continuously save and put dollars away and work hard. And that is very important.

0:08:02.7 SO: But at some point, you probably have enough... If you've done all of that, you have enough to meet your future needs. And those are the types of things that I work with people in the financial planning situation, that people can run the numbers themselves or work with a professional. And when you get to that point, maybe it's considering buying more time. Another thing that I see is, some people, maybe they're not quite there, and it is stressful, and they're behind the game in terms of where they're at financially.

0:08:34.8 SO: A situation that I think can work out very well is working longer can be a great retirement strategy. You can't always count on it because of health reasons and other issues, but shifting to a place that you enjoy living more, to a job that you enjoy doing more, one that's less stressful, maybe one that's more flexible, maybe one that has more autonomy, that's a better fit for your skill sets. But then, plan on doing that longer or doing a phased retirement where you're working part-time. That can work out very, very well. And even a fairly modest income in early retirement years doing something that you like, that can be very, very valuable. It's the equivalent of a large amount of money sitting in your investment account.

0:09:17.4 CJ: I love that. I'd like to spend a whole show just on that.

0:09:21.6 SO: Yeah. Well, okay, I'll make a note, maybe we'll talk about that in a future episode.

0:09:26.0 CJ: Alright. Well, speaking of time, we've only got a few minutes left. Is there anything else, Scott?

0:09:31.9 SO: Yes, a couple of items. My compliance team always wants to make sure I make disclosure that we're just having a general discussion here, not tend to be personalized advice, that I highly encourage listeners to do their own research, and where warranted, seek expert guidance. But you mentioned other episodes, and I know you're doing your membership drive, I did wanna point out that on WTIP, you're archiving these episodes. I'm posting them on my blog as well. And we've had past episodes where we've talked specifically about charitable giving and philanthropy. And I think it'd be wonderful to talk about considering the value of dollars and the impact, supporting your wonderful station. And I guess, this last thing is I really enjoy these conversations, it's fun follow-up side conversations with listeners. Please feel free to reach out, email, or you can find me on social media. I even pick up the phone.

0:10:30.1 CJ: That's awesome. And what is the best way for them to find you?

0:10:36.4 SO: Oh, well, probably one of the best ways is my blog is just www.scottoeth.com.

0:10:43.6 CJ: And that's O-E-T-H.

0:10:47.5 SO: O-E-T-H. Yup. They can find my contact info there, and that's where all these episodes, we've been posting and archiving them as well.

0:10:55.9 CJ: Wonderful. Thank you so much, Scott. Have a great day.

0:10:58.8 SO: Thanks, CJ. You, too.