Article: How the Traditional Rules of Frugality Undervalue Time (old, price, market)

[jasper12]

I spend money wisely...but I also know my limits....I cannot bake a cake, with the time cost of buying/shopping for ingredients, messing up the kitchen, cleaning it up, decorating a cake..for what it will cost to purchase a cake at the store. Store bought cake...

[user_id]

But this is the heart of "frugality", its basically spending time to save money and the sensibility of it depends on the monetary value of your time.

[modhatter]

Originally Posted by user_id

But this is the heart of "frugality", its basically spending time to save money and the sensibility of it depends on the monetary value of your time.

Years back women stayed home and raised the kids, baked bread and pies, scrubbed the floors, did the laundry, shopping, even sewed clothes (remember that?)

Today these Domestic Goddesses have to bring a paycheck home too.
So, as a rule something's gotta give. Few men still work the farm and spend part of the day doing their manly chores. They go out and work for someone else too. So who likes working all day to come home to more work.

That is why people aren't able to be so frugal, because there is just so much time in a day. So we wind up picking and choosing where we will be frugal.

[pvande55]

Part of the point of being frugal is so you don't have to spend so much time working. And many frugal strategies do not take much more time.

[abbymm]

Sometimes, I wish my husband is not so frugal. In some cases, I just value the time more than the savings. PP mentioned grocery delivery. Love the idea and it looks like we have it where we live. I'm sure hubby will say no.

[mathjak107]

i was so proud last week when my wife said the sink was clogged and draino didnt work i said ill fix it.

got a coat hanger ,gave a poke and the water went right down.

i was a hero.

that was for about 2 minutes until she turned the water on and yelled where is all this water coming from?

i guess i poked a hole right through the rusted p-trap.

one day ill learn, just call the man.

[mathjak107]

Originally Posted by user_id

But this is the heart of "frugality", its basically spending time to save money and the sensibility of it depends on the monetary value of your time.

i always looked at frugal as meaning it was doing things with savings in mind regardless of who is doing it or the time involved.

[lifeexplorer]

Time is only valuable if you are doing cost saving or revenue generating activities. If you are just sitting there watching TV, then it's not that valuable.

[chicagotodc]

Originally Posted by lifeexplorer

Time is only valuable if you are doing cost saving or revenue generating activities. If you are just sitting there watching TV, then it's not that valuable.

I think you missed the argument, its not that time has a dollar value its that its a function of utility. If the marginal utility of 1 minute doing something - anything - exceeds the marginal cost of that minute then you are better off by engaging in the activity, however trivial or meaningless it might otherwise appear. For instance, I might elect to watch TV for an hour and pay the neighbor's kid $5 to mow my lawn instead - because I gain utility (quiet, rest, downtime) from the TV and I value that more than I value the $5, or put differently, the marginal cost associated with mowing the lawn at 12pm on a hot summer day is higher than the marginal cost associated with hiring some kid to do it for me.

As income goes up, the marginal value of each incremental dollar decreases, and more often than not, the marginal value of time increases, thus, its not uncommon to see more and more 'outsourced' activities as your income goes up.

If time were only valuable to reduce cost or increase revenue, then we'd all work until we dropped. Surely, at some point, you'd say that you'd rather go sleep than make another $X dollars, at that point, the utility associated with sleep exceeds the utility associated with work.

My personal favourite absurdity are those who spend 30, 40, 50 hours a week 'coupon clipping' - because hey they got $300 worth of syrup for $9. Besides being a pathetically low wage anyway, the marginal utility of the 40th gallon of syrup must surely be zero, if not outright negative (I have to find somewhere to put it, store it, etc).

[ML North]

Originally Posted by chicagotodc

I think you missed the argument, its not that time has a dollar value its that its a function of utility. If the marginal utility of 1 minute doing something - anything - exceeds the marginal cost of that minute then you are better off by engaging in the activity, however trivial or meaningless it might otherwise appear. For instance, I might elect to watch TV for an hour and pay the neighbor's kid $5 to mow my lawn instead - because I gain utility (quiet, rest, downtime) from the TV and I value that more than I value the $5, or put differently, the marginal cost associated with mowing the lawn at 12pm on a hot summer day is higher than the marginal cost associated with hiring some kid to do it for me.

As income goes up, the marginal value of each incremental dollar decreases, and more often than not, the marginal value of time increases, thus, its not uncommon to see more and more 'outsourced' activities as your income goes up.

If time were only valuable to reduce cost or increase revenue, then we'd all work until we dropped. Surely, at some point, you'd say that you'd rather go sleep than make another $X dollars, at that point, the utility associated with sleep exceeds the utility associated with work.

My personal favourite absurdity are those who spend 30, 40, 50 hours a week 'coupon clipping' - because hey they got $300 worth of syrup for $9. Besides being a pathetically low wage anyway, the marginal utility of the 40th gallon of syrup must surely be zero, if not outright negative (I have to find somewhere to put it, store it, etc).

Nice post -- my personal style of frugality is certainly along these lines. For me, frugality is just about minimizing the amount of time, effort, and money I have to spend doing things that I don't want to do, but which allow to do the things I do want to do. It's an optimization problem, actually.