Are Chores Worth Your Time?
Have you ever wondered if hiring a housekeeper is really worth your money? Or if mowing the lawn is a good use of your time?
It's now possible to figure which tasks are worth your time and money, and which you should hire someone else to do.
Vera Gibbons, a correspondent for Kiplinger's Personal Finance Magazine, visits The Early Show on Tuesday to explain.
We've all heard the phrase: "Time is money." But, thanks to a new mathematical formula, it's now possible to put a precise value on our time. By knowing how much your time is worth, you can better decide how to make the most of your time.
A British economics professor devised the formula; his calculations are based on hourly wage, tax rate and cost of living.
The formula is complex; however, below are several examples - the general principles of each hold true no matter how much you earn.
Each example is based on the Labor Department's description of the average white-collar worker. The average worker:
- Earns $21.09 an hour
- Works 36.1 hours a week
- Earns $39,600 a year / in the 25 percent tax bracket
Examples:
Cooking vs. Takeout
This one may come as a surprise - or a relief - to all those living in the suburbs. Turns out you're wasting your money by cooking. From "a time is money" standpoint, it costs more to cook than order takeout because cooking eats up a lot of time. Assuming you spend one hour preparing chicken, rice and veggies and then a half hour cleaning up, it's going to cost you $33.73. However, a Boston Market meal for four only costs $20.99.
If you live in an urban or super urban area, takeout is still cheaper. However, the gap narrows considerably as your cost of living increases.
Work vs. Daycare
This is a big debate that many families face. Does it make more financial sense to have one parent stay home with the children, or should both parents work full time and pay for daycare? Calculations found that no matter where you live, it's most cost efficient to send children to daycare. What's interesting here is that the cost of staying home and caring for a family jumps considerably in the suburbs.
Super-Urban ($323.54) Urban ($508.42) Suburban ($711.79)
Super-Urban ($250) Urban ($250) Suburban ($165)
Hire A Housekeeper?
A housekeeper or maid service is a luxury that many people feel is worth the cost. However, if you live in an urban or super-urban area, it makes better economic sense to do it yourself. The following numbers are assuming you spend two hours cleaning or pay someone else to clean for two hours.
Super-Urban ($14.38) Urban ($22.60) Suburban ($31.64)
Super-Urban ($50) Urban ($50) Suburban ($30)
If you live in the suburbs, you would be wise to hire a housekeeper. However, if you earn less than the average worker, it makes sense to do it yourself, no matter where you live.
Mowing The Lawn
This is one of the few activities that makes most financial sense to do yourself, no matter where you live or how much you earn. If you hire the kid next door, it's going to cost between $14 and $25 more than pushing that mower yourself.
There are two big lessons to take away from this study, according to Gibbons. First, it points out that our time really is more valuable than we think. Second, the more you earn, the more sense it makes to farm out household chores.
However, as Mastercard's commercials remind us, you can't put a price on everything. If you love to cook, for example, it may be worthwhile for you to fix dinner - despite the study's findings.