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Time = Money

Learn what you're worth and when to outsource.
Chelsea Greenwood


Ticktock. Ticktock. Ticktock. For some, that’s what the
passage of time sounds like. For others, it goes more like
this: Cha-ching. Cha-ching. Cha-ching.

The most productive people—from Fortune 500 CEOs to 20-something yuppies—
view their time in dollars and cents. Yet many of us persist in thinking, “It’s cheaper
to do it myself,” or “Why pay someone else to do something I can do?” The answer, of
course, is that your time is precious and could be spent on activities that ultimately
reap great rewards—financial, as well as personal.

Even if you aren’t a victim of your own misguided work ethic or thriftiness, it’s easy
to get sucked into a time-wasting task—filing, doing laundry, entering data. You think
that chore will just take a few minutes, but over time, all the busywork adds up.

So how are you budgeting your time? Just as we scrutinize home and office budgets
down to the last penny, it’s important to look at how we’re spending our time and
whether or not each activity is a worthy allocation. (See sidebars on the following
pages to help you figure out the value of your time and what’s worth doing yourself.)
Seriously, why spend an hour on data entry—which you could pay someone maybe
$10 an hour to do—when you could spend those 60 minutes preparing a proposal that
could result in thousands of dollars in returns?

That’s just what Debra Cohen wondered. This self-described “mompreneur” started
a home-improvement contractor referral business in 1997 when the first of her two
daughters was born. “In the beginning, I tried to do as much as I could on my own
to save money, and, in the end, it cost me in time,” she says. “I quickly realized that I
needed help in order to focus on the money-making aspects of my business.”

Resourceful Outsourcing

Cohen was pleased to find outsourcing more economical than she thought. After hours
spent unsuccessfully trying to design her own logo, she figured she’d have to hire an
expensive agency. But she found a retired artist for much less.

When her business, Home Remedies of NY Inc., started to really take off, Cohen found
herself at another critical juncture. “I couldn’t keep up with my job orders, follow-up
calls, invoicing, etc. We had just planned our fi rst family vacation in more than five years
and couldn’t figure out how I could possibly leave my business.” At that point, Cohen
found a local mom who was looking for work. She trained and hired her immediately, and
the woman still works with her as her virtual assistant.

Today, Cohen’s workforce also
includes a webmaster, an accountant
and another stay-at-home
mom who used to practice law
but who now handles structure
and trademark issues. “With the
help of my outsourced workforce,
I’m able to focus my limited work
hours [three to five a day] on
client follow-up, networking and
contractor recruiting—the three
most important aspects of my business,” she says.

Cohen is equally judicious about her personal time. As her business thrived, she hired
a housekeeper and gardener. And when work is busier than usual, she doesn’t hesitate
to order dinners in or buy prepared meals. “At the same time, I try not to compromise
time with my family. I may order in dinner, but we will still sit down at the table together
to eat as a family. After all, they are the reason that I decided to work from home in the
first place.”

Practicing
Interdependence

With so many online
resources available, as well as
a sizable population of unemployed
people eager for freelance
or contract work, it’s
easier than ever to outsource
at work and at home. For
many people, though, hiring
others to do household or
personal chores is a bigger
stretch than outsourcing
work-related tasks.

“Most people ‘get’ that it
doesn’t make sense to try
to tinker with your car if
you’re not a mechanic,” says
Laura Stack, president of The
Productivity Pro Inc. “But you know how to do the laundry, so you
feel guilty for paying someone else to do it. What are you working
so hard for? To earn a bunch of money just to work hard again at
home? When do you get to raise your children, volunteer or spend
time on yourself? The money we spend on services is far better than
any other ‘stuff’ we could have bought with that money. Take a deep
breath, and join the millions of people who spend some of their
hard-earned money to buy a life.”

Stack suggests outsourcing is a way to practice interdependence.
“Service providers rely on you for their paychecks, and you rely on
them to free up your time,” she says. Many workaholics have trouble
practicing interdependence because it involves trusting others, relinquishing
control and, sometimes, funding another paycheck, she
says. (See sidebar below for warning signs that you need to delegate
more.) But interdependence is crucial to productivity because no one
person can or should do it all.

What Money Can’t Buy

Yet, there are some activities you cannot delegate or assign a
dollar value. “The danger to putting a money value on one’s time,
particularly if it is high, is that things that are important to do end
up seeming too expensive,” says George Loewenstein, professor of
economics and psychology at Carnegie Mellon University. “If you
start calculating the effective monetary cost of doing these things,
not only will you be likely to not do them when you should, but even
when you decide to go ahead and take the time, you’ll find yourself
distracted by thoughts about how much it’s costing you.”

He remembers keeping a mountain-biking date with his son
rather than taking on some well-paying consulting work. “The
thought of how much the biking was costing did detract from my
complete enjoyment of the day, but, afterward, I was very happy and
relieved that I had made what I am now certain was the right choice.
Years later, the money will be a drop in the bucket,
but spending a day mountain biking with one’s
son is irreplaceable.”

Loewenstein’s story illustrates an important
rule of thumb: “The things you
should avoid putting a price on are
things that involve people—family,
friends, students, colleagues,” he says.
“Relationships take time, and if you put
a price on the time you spend building
them and enjoying them, you will almost
always undervalue them.”

It’s also important not to undervalue your
relationship with yourself, which you can cultivate
through hobbies and alone time. You need that
time to recharge, and studies show you’re more effective at
work when you participate in activities you really enjoy,
which actually help you be more creative and better at
problem solving.

“Americans work some of the longest hours
among citizens of wealthy nations; we don’t
take much vacation and we retire late in life,”
Loewenstein says. “And the less time we take off,
the less we become capable of enjoying leisure
when we take it. Our leisure skills become atrophied,
and our leisure time ends up taking on the
frantic character of our work lives. We have developed
a tremendous engine of prosperity, but now we
need to figure out how to use our time better to enjoy
that prosperity.”

Post date: 
Jan 3, 2010

 

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